Re: Paul D. on this year's Nobel

[Roger Koppl <koppl@xxxxxxx>]

A couple of recent posting address a supposed conflict between two
interpretations of Keynes.  Loosely, itâs irrationality vs. nonergodicity.
(Iâll leave aside my criticisms of Paul Davidsonâs use of the term.)  I think
itâs a bit of a false dichotomy, however.  I think itâs fair to say that for
Keynes, investors are irrational *because* the world is nonergodic.  Rational
actions require adequate epistemological foundations.  If these foundations are
absent, rational action is impossible.  (All this in *Keynes* opinion.   My
opinions are irrelevant here.)  Thus, if people act when the epistemological
foundations for actions are too weak to sustain rational action, they are by
definition acting irrationally.  The ânonergodicityâ of the social world often
leaves us bereft of  epistemological foundations for action.  Itâs either
irrational action or no action.  Carabelli and De Vecchi (2000) say something
close to that, but for some reason imagine that we follow conventions only our
ignorance of is âtotal.â

Cheers,

Roger


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