Wednesday, April 14, 2010

Economics may be dismal, but it is not a science

"The standard approach has the appearance of science in its ability to generate clear predictions from a small number of axioms. But only the appearance, since these predictions are mostly false. The environment actually faced by investors and economic policymakers is one in which actions do depend on beliefs and perceptions, must deal with uncertainty and are the product of a social context. There is no universal economic theory, and new economic thinking must necessarily be eclectic. That insight is Keynes’s greatest legacy."

in reference to:

"dynamic stochastic general equilibrium"
- (view on Google Sidewiki)

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