What should we infer when our models make predictions that are not reflected in the world? Obviously there is a level of inaccuracy in every model, but is it better to presume we misunderstand the world or to use such errors to find problems preventing the world from matching our model? Explain your answer.
What should we infer when our models make predictions that are not reflected in the world? Obviously there is a level of inaccuracy in every model, but is it better to presume we misunderstand the world or to use such errors to find problems preventing the world from matching our model? Explain your answer.
Robert Lucas argues that the main model of efficient investment is remarkably inaccurate. What is the key critique of Lucas and how was this problem addressed in our model?
Many developing countries struggle with debt due to high interest rates and often low returns. Given what you learned in this chapter, why does this challenge exist? What might be a policy to alleviate it?
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
