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Change and Expectations in Macroeconomic Models:
Recognizing the Limits to Knowability
Roman Frydman and Michael D. Goldberg
March 13th, 2012

http://www.ifw-kiel.de/konfer/staff-seminar/paper/2012/Frydman_pape...

quote

Beyond building on Popper’s insights concerning the possibility, scope, and character of prediction in the social sciences, our IKE model of asset-price swings exemplifies Hayek’s claim that,

“Our capacity to predict will be confined to...general characteristics of the events to be expected and not include the capacity for predicting particular individual events”

(Hayek, 1978, p. 33).

Although an IKE model, by design, stops short of predicting “particular individual events,” such as when an asset-price swing will begin and end, it does generate predictions concerning their “general characteristics” – for example, that they tend to be quite persistent. Thus, by examining alternative models’ implications concerning the persistence and related features of such swings, an economist may compare explanations of economic phenomena.

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Tags: REH, asymptotix

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Comment by John A Morrison on July 22, 2012 at 11:26pm

thanx Sean, its a pretty ARCANE topic area but it has allways interested me, out for a walk yesterday I spotted a copy of this in an 'unusual' bookshoop ... couldn't believe it;

http://www.econ.nyu.edu/user/frydmanr/books.html

Comment by Sean Flanigan on July 22, 2012 at 10:12am

Great Post!

Comment by John A Morrison on July 20, 2012 at 11:44pm

Critical Review, Volume 19, Issue 1, January 2007
Jeffrey Friedman
Ignorance as a Starting Point: From Modest Epistemology to Realistic Political Theory

http://teageegeepea.tripod.com/CriticalReviewVol19Issue1.pdf

Comment by John A Morrison on July 20, 2012 at 11:40pm
Comment by John A Morrison on July 20, 2012 at 11:36pm

the REH "RATIONAL EXPECTATIONS" tag on asymptotix

http://www.asymptotix.eu/category/topics/rational-expectations

Comment by John A Morrison on July 20, 2012 at 11:33pm

the MACRO-FINANCIAL tag on asymptotix :

http://www.asymptotix.eu/category/topics/macro-financial

Comment by John A Morrison on July 20, 2012 at 11:31pm

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