Incomes Policy as a Social Institution

Paul Davidson

Chapter 6 in Inflation, Open Economies and Resources, 1991, pp 78-86 from Palgrave Macmillan

Abstract: Abstract The use of game theory requires the belief of the analyst that inflation is a symptom of a struggle over the distribution of income in which agents ‘believe’ they can and do affect the outcome by certain actions. In contrast, neoclassical theory, as Samuelson pointed out, requires an assumption that he called the ‘Ergodic Hypothesis’ (1969, p. 184). It is ‘a belief in unique long-run equilibrium independent of initial conditions.’ Samuelson indicates that the Ergodic Hypothesis implies that ‘If the state redivided income each morning, by night the rich would again be sleeping in their beds and the poor under the bridges.’ (This view, Samuelson notes, ‘makes economics out of fairy tales.’)

Keywords: Social Institution; Payoff Matrix; Fairy Tale; Neoclassical Theory; Income Policy (search for similar items in EconPapers)
Date: 1991
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-349-11516-7_6

Ordering information: This item can be ordered from
http://www.palgrave.com/9781349115167

DOI: 10.1007/978-1-349-11516-7_6

Access Statistics for this chapter

More chapters in Palgrave Macmillan Books from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().