How the Economy Works: Confidence, Crashes and Self-Fulfilling Prophecies

摘要

In two recent books, Roger Farmer presents a creative and thought-provoking approach to understanding macroeconomic fluctuations. How the Economy Works: Confidence, Crashes and Self-Fulfilling Prophecies is written for a general audience, while Expectations, Employment and Prices provides the technical underpinnings of his argument and is aimed at the economics profession. Farmer presents his work as essentially Keynesian in spirit and makes a deliberate effort to link his argument to The General Theory in a number of places. Therefore, his books can be considered part of the resurgent interest in Keynes following the recent financial crisis and recession. However, he is not among those calling to return to a Keynesian understanding that has been lost in the "Dark Age of Macroeconomics" [Krugman 2009a, b]. He also rejects the behavioralist approach of Akerlof and Shiller [2009]. Instead, Farmer embraces the methodological shift, arising from the work of Friedman, Lucas and others in the late twentieth century, which grounds modeling in the optimizing behavior of rational individuals.