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Sunday, January 23, 2011

Rational Expectations and the Efficient Markets Hypothesis

Roman Frydman emails that he'd like a chance to respond to Chris Sims' defense of DSGE models. This is from the session "Life After Rational Expectations":

Update: More from Roman Frydman on this topic:

 “The Imperfect Knowledge Imperative in Modern Macroeconomics and Finance Theory,” prepared for the conference on Microfoundations for Modern Macroeconomics, co-authored with Michael D. Goldberg, Center on Capitalism and Society, Columbia University, New York, November 2010, revised version forthcoming in Roman Frydman and Edmund S. Phelps (eds.), Micro-Macro: Back to the Foundations, Princeton University Press.

 “Opening Models of Asset Prices and Risk to Non-Routine Change,” prepared for the conference on Microfoundations for Modern Macroeconomics, Center on Capitalism and Society, Columbia University, New York, November 2010, revised version forthcoming in Roman Frydman and Edmund S. Phelps (eds.), Foundations for a Micro-Macro: Back to the Foundations, Princeton University Press.

And while I'm here again, turning in another direction, here's George Akerlof on whether the efficient markets hypothesis caused the crisis:

    Posted by on Sunday, January 23, 2011 at 01:45 AM in Economics, Methodology, Video | Permalink  Comments (25)


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