Conclusion – don’t believe a single thing of what these microfounders tell you until they have told you how they havecoped with – not evaded –Sonnenschein-Mantel-Debreu!
Of course, most neoclassical macroeconomists know that to use a representative agent is a flagrantly illegitimate method of ignoring real aggregation issues. They keep on with their business, nevertheless, just because it significantly simplifies what they are doing. It reminds – not so little – of the drunkard who has lost his keys in some dark place and deliberately chooses to look for them under a neighbouring street light just because it is easier to see there!Neoclassical economics – emperor without clothes
Lars P. Syll | Professor of Social Studies and Associate Professor of Economics, Malmo University
No link.
ReplyDeleteThanks, fixed.
ReplyDeleteWe've all heard this message, repeatedly many times, since John Law himself.
ReplyDeleteWhere's the action?
"It's better to create than to learn. Creating is the essence of life."
Julius Caesar
http://www.brainyquote.com/quotes/quotes/j/juliuscaes156552.html
may be mis-attributed, but it's still a valid point, regardless of who made it;
it's good to have options,
but selection matters even more than data and options