Friday, March 18, 2016

The previous post as a picture

The previous post as a picture:


4 comments:

  1. I'm still wondering why anyone took microfoundations seriously in the first place. As someone who rarely works with non-microfounded models, I don't have the slightest expectation that the model is remotely close to reality, but apparently most of the theoretical people in the field disagree.

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    Replies
    1. Microfoundations sound very serious in the "very serious people" sense that e.g. Krugman uses. Very hard headed, proper and analytical.

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    2. Too bad it's just an ad hoc methodological assumption.

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    3. I've said this before, but I like it primarily because of internal consistency -- I could care less about what is being maximized or how expectations are formed, but as long as there is a budget constraint I'm usually theoretically satisfied. This is why I think it would be interesting to create a maximum entropy version of the canonical RBC/Ramsey model, simply replacing utility with entropy.

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