models

Economic Rules: The Rights and Wrongs of the Dismal Science

Reading notesEconomic Rules, The Rights and Wrongs of the Dismal Science by Dani Rodrik
Quotes that could give us some ideas and opinions about the economic models used by economists and why not, to motivate you to get more insights in this regard by reading a good book.

Real-world markets are imperfect, unlike those envisioned in economic models. Economic models assume the participation of rational actors, but people do not behave in a rational manner.

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Economics is a science because it employs the use of models. Economic models identify probabilities, regularities and tendencies.

“Economics is a social science, and society does not have fundamental laws – at least, not in quite the same way that nature does.”

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Collective is irrational !

Condorcet Paradox = Agregation of preferences.

Each person is rational. But Collective not. Collective is irrational. At the macro level there is a logic inconsistency. That’s why social world is very different of the parts that comprise it.

Preference Aggregation-Model Thinking-Scott E. Page