- 25 Nov 2023 14:31
#15296498
This thread is about several things that Dr. Steve Keen says.
The title I chose is about the Rational Actor simplifying assumption. One element of it, according to Dr. Keen, is that the rational actors are all able to predict the future very accurately.
This is obviously false.
Why can I assert this with 100% confidence and be willing to bet my life on it?
It is because the professional economists are all (by the assumption) "rational actors", and yet at most 2 of the mainstream economists predicted the GFC/2008 before it started. AFAIK, every single economist of the few who predicted the GFC was a heterodox economist and so didn't believe in the Rational Actor assumption.
So, mainstream economists assume that the man on the street can accurately predict the economic future, but none of them could get that prediction right. Doesn't this prove that rational actors can't predict the future, and so every conclusion proved with this premise is not proved and is invalid?
.
The title I chose is about the Rational Actor simplifying assumption. One element of it, according to Dr. Keen, is that the rational actors are all able to predict the future very accurately.
This is obviously false.
Why can I assert this with 100% confidence and be willing to bet my life on it?
It is because the professional economists are all (by the assumption) "rational actors", and yet at most 2 of the mainstream economists predicted the GFC/2008 before it started. AFAIK, every single economist of the few who predicted the GFC was a heterodox economist and so didn't believe in the Rational Actor assumption.
So, mainstream economists assume that the man on the street can accurately predict the economic future, but none of them could get that prediction right. Doesn't this prove that rational actors can't predict the future, and so every conclusion proved with this premise is not proved and is invalid?
.