by Summary:
Paul Krugman still wrong. The mainstream model of an economy based on general equilibrium, rational utility maximization, and money neutrality is one of a possible world that doesn't exist and can't exist in a monetary production economy. There is nothing wrong with constructing models of possible worlds, and, in fact, all models exist in possibility space, not real space. But it is wrong to claim or imply that such models of possible worlds apply to the real world when there is evidence that they do not. This is what science is about, and it is the difference between doing science and doing mathematics. Conventional economic theory is largely mathematical with an impeccable logic pedigree from axioms, but it not scientific in that it lacks an empirical warrant. The models are
Topics:
Mike Norman considers the following as important: Economic Theory, john maynard keynes, Karl Polanyi, paul krugman
This could be interesting, too:
Paul Krugman still wrong. The mainstream model of an economy based on general equilibrium, rational utility maximization, and money neutrality is one of a possible world that doesn't exist and can't exist in a monetary production economy. There is nothing wrong with constructing models of possible worlds, and, in fact, all models exist in possibility space, not real space. But it is wrong to claim or imply that such models of possible worlds apply to the real world when there is evidence that they do not. This is what science is about, and it is the difference between doing science and doing mathematics. Conventional economic theory is largely mathematical with an impeccable logic pedigree from axioms, but it not scientific in that it lacks an empirical warrant. The models are
Topics:
Mike Norman considers the following as important: Economic Theory, john maynard keynes, Karl Polanyi, paul krugman
This could be interesting, too:
Steve Roth writes John Maynard Keynes Doesn’t Seem to Know What He Means by the Word “Spending”
Bill Haskell writes Krugman’s Latest Economic Opinion
NewDealdemocrat writes Paul Krugman’s “Goldilocks” economy is likely to prove “transitory”
Robert Vienneau writes Elsewhere
Paul Krugman still wrong. The mainstream model of an economy based on general equilibrium, rational utility maximization, and money neutrality is one of a possible world that doesn't exist and can't exist in a monetary production economy.
There is nothing wrong with constructing models of possible worlds, and, in fact, all models exist in possibility space, not real space. But it is wrong to claim or imply that such models of possible worlds apply to the real world when there is evidence that they do not. This is what science is about, and it is the difference between doing science and doing mathematics.
Conventional economic theory is largely mathematical with an impeccable logic pedigree from axioms, but it not scientific in that it lacks an empirical warrant. The models are attractive but vacant.
Lars P. Syll’s Blog
Polanyi and Keynes on the idea of ‘self-adjusting’ markets
Lars P. Syll | Professor, Malmo University