Explanation of why S&D Models fail, general problems with methodology of Economics, and how we can improve methodology by -- replacing maximization by behavioral rules -- replacing equilibrium by disequibllrium -- replacing simple mathematical models by heterogenous agent based models which CANNOT be solve mathematically, but can be solved by the computer.
Sample Questions for Final
1. Provide two reasons why the principle of maximization as a guide to human & firm behavior does not work in reality. Provide an ALTERNATIVE which might be a more useful assumption.
2. Explain why EQUILIBRIUM is not useful in understanding the real world, and why we must consider disequilibrium
AM30 Concluding Lecture - Summarizes directions required for making progress in economics.