Mainstream Macroeconomics in the Light of Popper

La macroeconomía ortodoxa a la luz de Popper

Iván H. Ayala () and Alfonso Palacio Vera ()
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Iván H. Ayala: Universidad Complutense de Madrid. Facultad de Ciencias Económicas y Empresariales.
Alfonso Palacio Vera: Universidad Complutense de Madrid. Departamento de economía Aplicada III (Política Económica)., https://www.ucm.es//departamento-de-economia-aplicada,-publica-y-politica

No 14-04, Documentos de trabajo de la Facultad de Ciencias Económicas y Empresariales from Universidad Complutense de Madrid, Facultad de Ciencias Económicas y Empresariales

Abstract: Macroeconomics has been dominated over the last four decades by the Rational Expectations Hypothesis (REH) which implies that economies are inherently stable. REH is a key element of the New Neoclassical Synthesis (NNS) macroeconomic model which has also played a dominant role in theory and policy analysis over the last two decades. We analyse REH in light of Popper´s evolutionary theory of knowledge and learning. We claim that the latter provides macroeconomics with an epistemological and ontological foundation that, unlike REH, takes full account of human fallibility and upon which economists can build a more useful macroeconomic theory.

Keywords: knowledge; Learning; Rational expectations; Evolutionary; Popper.; Conocimiento; Aprendizaje; Expectativas racionales; Evolucionista; Popper. (search for similar items in EconPapers)
JEL-codes: A12 B41 B50 (search for similar items in EconPapers)
Pages: 22 pages
Date: 2014-10
New Economics Papers: this item is included in nep-hpe
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