No, really. Business Insider contacted him about his 2009 warning that soaring inflation and interest rates were just around the corner — and he not only admits that he was wrong, he admits that his error signified something wrong with his overall economic model:

“Usually when you find the model this far off, you’ve probably got something wrong with the model, not that the world has changed,” he said. “Inflation does not appear to be monetary base driven,” he said.

This is a remarkable act of intellectual honesty — remarkable because it happens so rarely.

I do wonder exactly what model Laffer was using. As I pointed out again and again, basic IS-LM analysis said that even huge increases in the monetary base aren’t inflationary in a liquidity trap; and yes, I was making that prediction in advance. From where I sit, our models have worked just fine.

But still, credit where it’s due — Laffer, unlike almost everyone else in the inflationista camp, has admitted both that he was wrong and that some rethinking is needed.