One troublesome aspect is the place of rational expectations macroeconomics in the often political debate over Keynesian economics. At least implicitly, many people feel that what's bad for the rational expectations viewpoint is good for the Keynesian one, and vice versa. But it is hard to see how the problems in using the rational expectations approach to explain monetary nonneutrality can alleviate the theoretical and empirical shortcomings of the Keynesian model.
Robert BarroRelated topics
approach aspect bad debate economics good hard least model people place political rational see using vice viewpoint keynesian macroeconomics nonneutralityRelated quotes
A man who is wrathful with us is a sick man; we must apply a plaster to his heart - love; we must treat him kindly, speak to him gently, lovingly. And if there is not deeply-rooted malice against us within him, but only a temporary fit of anger, you will see how his heart, or his malice, will melt away through your kindness and love - how good will conquer evil. A Christian must always be kind, gracious, and wise in order to conquer evil by good.
John of Kronstadt
Ambedkar traces Buddha's rational approach, which he values so much, to Kapila, the founder of the Samkhya-Darshana, the 'viewpoint' focusing on cosmology: 'Among the ancient philosophers of India the most preeminent was Kapila (') The tenets of his philosophy were of a startling nature. Truth must be supported by proof. This is the first tenet of the Samkhya system. There is no truth without proof. For purposes of proving the truth Kapila allowed only two means of proof-1) perception, and 2) inference.
Kapila
Prior work has shown an association between diversification strategy and profitability. This paper replicates that association using more recent and complete data and goes on to investigate the sources of the association. Theoretical arguments are advanced which predict the association which will remain once the effects of varying industry profitability are removed. Empirical tests verify this prediction and permit the discrimination between the effects of industry and diversification strategy on profitability.
Richard Rumelt
Ball, Mankiw, Romer and others style themselves as New Keynesians. Their program is to develop improved microeconomic foundations for imperfectly flexible prices. In the process, they hope to illuminate the paradox that individually rational or near-rational behavior can result in significant collective market failures. These are certainly laudable objectives. In the end, I suspect, the program will not change the essential substance of Keynesian macroeconomics. But it will make Keynes more palatable to theorists.
James Tobin
The further away a scholarly opinion is from direct observation and the more abstract and ‘theoretical' it is, the more defenseless it becomes against insidious opportunist errors of judgment. In economics, model thinking in particular creates scope for systematic biases... But of course all social studies must nevertheless aim at generalization. It is thus important to be able to think concretely at the same time, as I learnt from Gustav Cassel.
Gunnar Myrdal
