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Uncertainty Economics

Why Economists Are Right: Rational Expectations and the Uncertainty Principle in Economics -- Part II

David K. Levine | Posted 03.31.2012 | Business
David K. Levine

Rational expectations captures the uncertainty principle in economics: your behavior depends on the theories you believe.

Why Economists Are Right: Rational Expectations and the Uncertainty Principle in Economics -- Part I

David K. Levine | Posted 03.27.2012 | Business
David K. Levine

Much is made of the inability to forecast the current crisis of economics; others say that it arises from the assumption of "rational expectations." On the contrary: it is a fundamental principle that there can be no reliable way of predicting a crisis.