Sunday, October 27, 2013

Lars P. Syll — Simon Wren-Lewis on rational expectations — so wrong, so wrong

The real macroeconomic challenge is to accept uncertainty and still try to explain why economic transactions take place – instead of simply conjuring the problem away by assuming rational expectations and treating uncertainty as if it was possible to reduce it to stochastic risk. That is scientific cheating. And it has been going on for too long now.
Simon Wren-Lewis on rational expectations — so wrong, so wrong
Lars P. Syll | Professor, Malmö University

See also Micro vs Macro, which is a longer and more detained (wonkish).

1 comment:

Detroit Dan said...

Off Topic: Good interview with Stephanie Kelton -- Stephanie Kelton Virtually Speaking with Jay Ackroyd.

This was linked on Duncan Black's popular blog: Please Forward to Gene Sperling