Re: <no subject>

[Basil Moore <bmoore@xxxxxxxxxxxxxxxxx>]

Harry
I am not sure whether you can find economic behavior that is not forward
looking?  Can you give some examples??  In nearly all our economic behavior
we directly or indirectly consider time.
I do agree that individuals look at the past, and are very much involved in
attempting to right past errors (mistakes). But if you conceded that the
world is nonergodic, the past is not a reliable guide to the future, even
though it is all we have. Past relationships keep changing, the
distributions as well as the outcomes. They keep changing the number of
black balls in the urn!! So as Keynes insisted we cannot make accurate
quantitative probablity estimates of future outcomes. But we must take
decisions, even with incomplete information. (By being born we have no
choice, we are already committed!)
So I still would insist we spend most of out time trying to estimate what
the future holds in store for us.
We may take responsibility for our actions, and we may have a sense of
self. But we cannot know the future, because it has not yet occurred.
Basil

At 04:43 PM 12/2/00 +0100, you wrote:
> Basil Moore wrote:
>
> <snip>
> >There can never be a
> >general or even a partial equilibrium situation, because, ultimately, all
> >economic behaviour is forward looking. Since the future is unknowable, our
> >expectations of the future are continuously changing. Equilibrium means
> >'sarcophagus' for all complex systems.
> <snip>
>
> All economic behaviour is not forward looking.
>
> Yes, the future is unknowable, but individuals aren't always fussing over
> the future. By that I do not mean they are propelled into the future by
> irrational animal spirits.
>
> What I do mean is individuals normally look at the past and act in the
> present in order to right past wrongs. i.e. they are shaping the world
> and taking responsibility for the consequences of their decisions.
> The individual retains a sense self so his actions cannot be explained
> in terms of mob (i.e. Keynesian) psychology.
>
> This must not be confused with the mathematical (or bounded) view
> of rationality, where under some limited circumstances the future can
> be computed from the past.
>
> Macroeconomic modeling must include all three forms of behaviour
> and be able to identify circumstances where each is most
> applicable. For example I believe Keynesian macroeconomics is
> most applicable to hyper-inflationary economies.
> Hyperinflation is a signal that animal spirits
> rule a nation's economy.
>
>
> Harry Veeder