Dom S says:
August 27 2018 at 6:54 pm
“But let’s also be clear that the stereotype of capitalism that so many want to believe in is as simplistic, and as wrong, as that of socialism I have noted above. That stereotype is widely taught by economists as if it is true.
It assumes that all markets are ‘perfect’. That means there are masses of firms engaged in the supply of any product and each competes only on price because consumers have all the information they need on all of them to know that the products are indeed identical.”
I’ve never heard of an economist that argues that all markets are perfect.
Can you please name one economist, and cite his or her work where he or she makes this claim?
Richard Murphy says:
August 27 2018 at 9:27 pm
That is the foundation of micro and in turn all macro
Rational expectations are built on this idea
Find me neoclassical economists who do not think this, or at least think this is the model from which all other models deviate
That would be all of them then.
What is the ‘Rational Expectations Theory’?
The rational expectations theory is an economic concept whereby people make choices based on their rational outlook, available information and past experiences.
He’s missed the importance of “available” there.
Obviously people on’t have all information. If this were true there would never be any new information which moved markets and the efficient markets hypothesis would be wrong, wouldn’t it?