economists say rationnal models don’t work


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2 thoughts on “economists say rationnal models don’t work

  1. Dear Freddie ( I think that my first attempt has fucked)
    Please don’ throw the baby…….. The article was not against rationnality but against forecasting models based on the idea of a totally rationnal Homo Economicous.
    As an old keynesian, I have never believed that rationnality ( and Stock Market is the best field of experimentation for that) that rationnality was the unique driver of economical behaviour. Regarding Stock Market , Keynes talked about “animal spirits”. A crisis comes generally when the discrepancy between “financial dreams” and the hard facts of the rationnal real world appears. When shareholders ask for 10% increase in their revenues while the real growth is 4, you can be sure that sooner or later the shit will hit the fan. ( And u should know what I am talking about)

    I have never, as a keynesian, believed in this old stuff of the 80′ ( Milton Friedmann meets Duran Duran) called the “rationnal expectations” theory. It was based on the idea are that we are so smart that any gv decision will be uneffective because already anticipated, integrated and corrected by all the genious we are.

    BUT AS CEO OF A COMMUNICATION COMPANY, this theory works for pitches. As soon as you feel that the bright posture/comment/idea you are so proud to show to your prospect next week, has already been anticipated by him, it’s time for a U-Turn and a drive to an unexpected direction.
    Cheers
    And thank’s again for raising issues

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