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In this paper we report the results of a laboratory experiment, in which we observed the behavior of agents in a simple macroeconomic setting. The structure of the economy was only partially known to the players which is a realistic feature of our experiment. We investigate whether subjects...
Persistent link: https://www.econbiz.de/10010264726
A large market economy has a huge number of degrees of freedom with weak microlevel coordination. The 'implicit microfoundations' approach assumes this property of micro-level interactions more strongly conditions macro-level outcomes compared to the precise details of individual choice...
Persistent link: https://www.econbiz.de/10010298577
A large market economy has a huge number of degrees of freedom with weak microlevel coordination. The 'implicit microfoundations' approach considers this property of micro-level interactions to more strongly determine macro-level outcomes compared to the precise details of individual choice...
Persistent link: https://www.econbiz.de/10010298637
We report the results of a laboratory experiment, in which we observed the behavior of agents in a simple macroeconomic setting. The core question of this paper is whether standard macroeconomic models generate correct predictions despite their unrealistic assumptions of prefectly rational...
Persistent link: https://www.econbiz.de/10014215496
The dominant view among macroeconomists is that macroeconomics reduces to microeconomics - both in the sense that all macroeconomic phenomena arise out of microeconomic phenomena and in the sense that macroeconomic theory - to the extent that it is correct - can be derived from microeconomic...
Persistent link: https://www.econbiz.de/10014217743
The commonly used method for representing macroeconomics as a social system is by assuming the existence of a number of agencies (or entities) and of their various connecting links. In practice this is achieved and illustrated by the use of a block-and-flow diagram. For the case being considered...
Persistent link: https://www.econbiz.de/10012971831
In the real world, prices do not behave symmetrically. Usually, nominal wages and prices are sticky downward but a lot more flexible upward; the latter is illustrated by inflationary and hyperinflationary processes. However, most mainstream economics is built upon the assumption that nominal...
Persistent link: https://www.econbiz.de/10012952767
A number of macroeconomic theories, very popular in the 1980s, seem to have completely disappeared and been replaced by the dynamic stochastic general equilibrium (DSGE) approach. We will argue that this replacement is due to a tacit agreement on a number of assumptions, previously seen as...
Persistent link: https://www.econbiz.de/10012902313
We propose a novel interpretation and formalization of Kahneman and Tversky's findings in the Linda experiment which implies that subjects are rational in the sense of Muth's hypothesis and provides an approach to specifying rational assessment of uncertainty in macroeconomic models....
Persistent link: https://www.econbiz.de/10013235974
Joan Robinson and Michal Kalecki were two of the intellectual giants of twentieth century economics, whose contributions over a significant range of issues have had major impacts on economics. This paper examines the significant communications between them, concentrating on the major cross...
Persistent link: https://www.econbiz.de/10013136704