[PEN-L:8373] Re: Re: Re: Thomas Friedman an economist?

[Ken Hanly <khanly@xxxxxxxxxxxxxxx>]

Now that is an interesting theory. If the real world diverges from the
theory this does not lead
the theorist to alter the theory but to claim that the world ought to be
modified to fit what the theory predicts. Must be some sort of moral
theory. Preachers continually ask that the world
change so that people behave as they ought instead as as they do. I can
imagine Newton lecturing the apple if it did not fall according to the
laws of gravitation. "You better behave you goddamn apple or I'll cut off
the World Bank loan to the orchard and there won't be any more apples."
    Cheers, Ken Hanly


Doug Henwood wrote:

> 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