I agree with everything Peter Dorman has to say in this post at EconoSpeak. A couple key points: First, economic theory, taken as a whole, is culpable. The core problem is that each theoretical departure, whether it is a knotty agency problem or a behavioral kink, is inserted into an otherwise pristine general equilibrium framework. [...]
Posts Tagged ‘equilibirum’
Not Just a Failure of Economists
Posted in Uncategorized, tagged Economic Debates, economics as science, equilibirum on May 11, 2009 | Leave a Comment »
“Irrational everything”
Posted in Uncategorized, tagged behavioral economics, equilibirum, financial crisis on April 21, 2009 | Leave a Comment »
Via Mark Thoma, this interview with behavioural economist Daniel Kahneman talks, among other things, about the failure of models: “In the last half year, the models simply didn’t work. So the question arises: Why do people use models? I liken what is happening now to a system that forecasts the weather, and does so very [...]
Soros against Equilibrium
Posted in Uncategorized, tagged equilibirum, financial crisis on December 22, 2008 | Leave a Comment »
This headline is striking for its elegance: “Revise regulation, the theory of market equilibrium is wrong”. Obviously this speaks directly to a major criticism of neoclassical theory by heterodox economists. An article in the Real World Economics Review (formerly PAER) identifies methodological equilibration as one of three axioms intrinsic in neoclassical theory. Soros’ criticism strikes [...]
