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Funny about assumptions. A model will say whatever a designer wants depending on choice of assumptions. The "one simple trick" of neoclassical economics is unrealistic assumptions. Neil demonstrates this cleverly. Fix just one unrealistic assumption that is actually more in line with price theory — demand is relative to price rather than randomly selected — and voilà, equilibrium fails. Short.New Wayland BlogRevealed: The Simple Change That Breaks Mainstream MacroNeilW
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Funny about assumptions. A model will say whatever a designer wants depending on choice of assumptions. The "one simple trick" of neoclassical economics is unrealistic assumptions. Neil demonstrates this cleverly. Fix just one unrealistic assumption that is actually more in line with price theory — demand is relative to price rather than randomly selected — and voilà, equilibrium fails. Short.New Wayland BlogRevealed: The Simple Change That Breaks Mainstream MacroNeilW
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Mike Norman considers the following as important:
This could be interesting, too:
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Funny about assumptions. A model will say whatever a designer wants depending on choice of assumptions. The "one simple trick" of neoclassical economics is unrealistic assumptions. Neil demonstrates this cleverly. Fix just one unrealistic assumption that is actually more in line with price theory — demand is relative to price rather than randomly selected — and voilà, equilibrium fails. Short.
New Wayland Blog
Revealed: The Simple Change That Breaks Mainstream Macro
NeilW