Tuesday, August 18, 2009

Yet another take on "Why Economics Failed"

Yet another take on "Why Economics Failed".

- "I am wholly unconvinced most macroeconomic theory can ever hope to make consistently accurate predictions. There are entirely too many variables, and people just aren't as rational as economists like to assume they must be".

- "the concept of rationality even exaggerates rationality. Even with good information, people often make stupid decisions based on emotion. I would even argue that generally people are more emotional than rational -- and that's a huge problem for modern economics".

On the other hand, truly modern economics takes into account behavioral factors and irrational behavior of some economic agents.

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