2023 FUTURE OBSERVATORY
2023 FUTURE OBSERVATORY
Traditional economic theory has lost much of its practical power. Indeed, even academic economists have in recent times been forced East, to practice the their craft - from which they were now barred in the West - on the unsuspecting ex-communists trying to come to terms with what market forces were all about. Funded, in particular, by the US government - they caused as much chaos on a national scale as they had previously done within organisations in the West!
In the West itself, one focus has now moved, even among many economists, to behavioural issues. This started in earnest with Herbert Simon's work - as an economist as Carnegie Mellon University, during the 1950s - on bounded rationality. Even so, almost half a century later, the message has been slow in arriving. Contemporary economic theories still assume that humans are rational, and so tend to ignore apparently irrational behaviour. By the end of the 1980s, however, Frank Hahn - president of the Royal Economics Society - was reported as saying that the interesting work in current economics is work which starts from the assumption that people are not peanuts, but act according to rational expectations based on past experience. This was an earlier, narrower and less flexible, version of the more general 'expectations theory' from which viewpoint this book is written. Originally introduced by Richard Muth in the 1960s, in the 1970s it was combined with the work of Milton Friedmann by Robert Lucas at the University of Chicago - from where much of the conservative economic their which dominated the later 19790s and 1980s emerged - to offer, for a time, a powerful, conservative argument for non-intervention. The contents of this database assume a more general form of this 'expectations theory'.
15 May 2003
Other pages you might like to consider are:
hits
Copyright © 2005 Future Observatory