Saturday, August 6, 2016

The waves must be stopped ASAP

The nuggets of value in the multi decade
rational expectations project
Agents do more then adapt
they anticipate
They can learn
Rat ex simply compresses the time interval of learning to zero
Ie it's a comp stat version of a system with learning capabilities
And is thus subject to the Keynes observation :
It's not enough to say the sea will settle down eventually
Policy must be about comparative dynamics
Even if formal apparatus fails to be adequate to the task
That remains the task of macronauts
Find the best path possible not just the best. Targets

Learning by doing is the only way in a system filled with new uncertainties
at every juncture