[PEN-L:8366] Re: Re: Thomas Friedman an economist?

[Doug Henwood <dhenwood@xxxxxxxxx>]

Rod Hay wrote:

> One can interpret the Arrow-Debreu model as the ultimate undermining
> of neoclassical general equilibrium. By showing the conditions that
> are required to reach an equilibrium, they demonstrate that it is
> extremely unlikely to occur in any actual economy. (The necessity
> for perfect and complete futures markets has been pointed out).

But most neoclassicals respond to this by saying that the world is
close enough to the theory, and that where the real world differs
from theory, the real world should be changed to match the dictates
of theory. So you've got Shiller seriously talking about futures
markets in everything.

Doug