In central banking circles, it is viewed as obvious that the accumulation and destruction of reputational capital more closely resembles adaptive than rational expectations - it lags behind reality. Here, I think, the central bankers are closer to the truth than the economic theorists.
Alan BlinderRelated topics
banking behind central closer think truthRelated quotes
Economic power is exercised by means of a positive, by offering men a reward, an incentive, a payment, a value; political power is exercised by means of a negative, by the threat of punishment, injury, imprisonment, destruction. The businessman's tool is values; the bureaucrat's tool is fear.
Ayn Rand
Fundamentally, there are only two ways of coordinating the economic activities of millions. One is central direction involving the use of coercion the technique of the army and of the modern totalitarian state. The other is voluntary cooperation of individuals the technique of the marketplace.
Milton Friedman
