Crisis and Theoretical Methods

February 3, 2017

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.

Author: Duncan Foley
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