by None of this is an argument in favor of taking a road along which there is less rigorous thinking. Our problem is much more that we have developed our models using certain mathematical techniques and that we have become slaves to those techniques. It is surely this more than anything else that has led us to persist with a model that, to any outsider, seems such a poor description of what actually happens in markets. The real world is one in which various market forms coexist, where different prices for goods are observed, and where the individuals who participate have only very local information. The appropriate notion of demand in such a world is certainly not close to the definition that we find in general equilibrium theory, but this does not make it any less interesting
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Lars Pålsson Syll considers the following as important: Economics
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Lars Pålsson Syll writes DSGE models — worse than useless
Lars Pålsson Syll writes DSGE models — a total waste of time
Lars Pålsson Syll writes Was MMT right about inflation? Yes!
Lars Pålsson Syll writes Brownian motion (student stuff)
None of this is an argument in favor of taking a road along which there is less rigorous thinking. Our problem is much more that we have developed our models using certain mathematical techniques and that we have become slaves to those techniques. It is surely this more than anything else that has led us to persist with a model that, to any outsider, seems such a poor description of what actually happens in markets. The real world is one in which various market forms coexist, where different prices for goods are observed, and where the individuals who participate have only very local information. The appropriate notion of demand in such a world is certainly not close to the definition that we find in general equilibrium theory, but this does not make it any less interesting to analyze. The only drawback is that we may have a lot more intellectual climbing to do.