The previous post as a picture:
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Also, try to avoid the use of dollar signs as they interfere with my setup of mathjax. I left it set up that way because I think this is funny for an economics blog. You can use € or £ instead.
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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.
ReplyDeleteMicrofoundations sound very serious in the "very serious people" sense that e.g. Krugman uses. Very hard headed, proper and analytical.
DeleteToo bad it's just an ad hoc methodological assumption.
DeleteI'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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