What we have just witnessed is the economics equivalent of the Sokal hoax. It wasn't a hoax, just a mistake, but the effect was the same. We all make mistakes. What matters is that the rest of us didn't all spot that mistake immediately. Even those of us who did see that something was wrong didn't immediately identify what exactly was wrong. We need to ask ourselves why. We can't blame the person who made the mistake if we didn't immediately see it either.
Many economists have been puzzled by recent house price inflation. My theory shows that house price inflation was caused by too many houses being built....Loadsa theory.....Let me give you the intuition with a simple thought-experiment. Suppose builders suddenly increase the stock of houses on the market. The rate of house price inflation must increase for people to be willing to hold those extra houses, because people demand more houses when they expect rising house prices.
If you believe my explanation makes sense, you will also understand why Zimbabwe had hyperdeflation. There needed to be ever-accelerating deflation, so that people would willingly hold all that extra money.
But why didn't we immediately see what was wrong?