ECO 3343 Lecture Notes - Behavioral Economics, Monetarism, Behaviorism
Document Summary
The two strands to behavior economics: people are not rational, much of modern economics is unrealistic. Modern economics consist of almost nothing but models. If people were not rational, then we wouldn"t be able to speak, write, etc. The two assumptions at base of all economic theory in history: people are rational and people are self interested. Does not deny that people are self interested. But denies that they achieve their self interest because of their irrationality. Therefore we need an economic dictator to tell us what to do. The alleged justification of freedom is people can choose what they want. But this presupposes that they know what they are doing. Since they do not, there is no reason why this state should not tell you what to do. There is an internal contradiction here right on the face. Not like classical economics, neoclassical economics, marxism, keynesian , or monetarism.
