Crisis and Theoretical Methods

Duncan Foley

Feb 3

Written By SCEPA

WORKING PAPER

(410 KB)

This talk explores methodological alternatives to macroeconomic analysis based on price-taking Walrasian intertemporal general equilibrium models.

Social interaction equilibria in conjunction with constraints from information theory highlight the social coordination problems at the root of macroeconomic policy questions. Equilibrium concepts enhance the explanatory power of economic theories in contrast with the limitations of disequilibrium dynamical systems analysis and agent-based modeling. Constrained maximum entropy methods offer a general approach to macroeconomic modeling. Various conceptions of equilibrium in economics arise from distinct conceptions of expectations.

working paper

SCEPA

Crisis and Theoretical Methods

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SCEPA is part of the Economics Department at The New School for Social Research