As stock market indices sink lower, it's good to remember that economic predictions depend partly on human behavior, which is never entirely rational or predictable.
For some good reading on this subject, the classic book published back in 1841 is Extraordinary popular delusions and the madness of crowds (133.7 M19E ) by Charles Mackay, which describes events such as tulipomania, a precursor to the high tech stock bubble of the 1990s.
An updated book on the same subject of people behaving crazily is Irrational exuberance (332.63222 SH621I) by Robert Shiller. Human nature hasn't changed much in the last few hundred years.
Economists have even started examining neuroscience research to find clues on behavior. Try reading Your money and your brain : how the new science of neuroeconomics can help make you rich (332.6019 Z92Y) by Jason Zweig to see how you can personally profit from their insights.
Is your person financial decision-making not so great? Read Why smart people make big money mistakes--and how to correct them : lessons from the new science of behavioral economics (332.024 B419W) by Gary Belsky to find out the reason for self-defeating behavior.
From a broader philosophical approach, Nassim Taleb, a former hedge fund manager, explains how we fool ourselves into thinking we know more than we actually do in The black swan : the impact of the highly improbable (003.54 T143B).
