Humans fundamentally irrational about money
Economists have suffered a collapse in credibility since the global financial crisis began. Faith in the efficiency of markets and the invisible hand is out; “behavioral economics,†which stresses that humans are fundamentally irrational actors, is in. We are blind to risk; we make decisions on a whim; we prefer consuming now over saving for later. Human fallibility seems to be the perfect explanation for an unfathomable crisis. Here’s how—after years of being considered a quaint subfield—behavioral economics has finally stolen the limelight.
Anthropology of an Idea: “Behavioral Economics†by Elizabeth Dickinson in Foreign Policy.
Answers to questions you might be asking, unless you wandered onto this site purely by accident >>>
August 30th, 2009 at 09:26
That new economic trend is more irrational than Keynesianism. It is Keynesianism that dugged the hole in the first place and put the blame on the free market. By not challenging
the fallacies of Keynesianism, this will bring us into a much deeper hole by embracing the worst remedy by condemning humanity itself.
Why not blame the government and its economists who controls the economy by taxation and through inflating the money supply and spend billions at whim? It is obvious not us poor filipinos who simply wants to make ends meet and because we are irrational. Its the idea of the creation of “money out of nothing” and the malinvestments that created all these troubles.