Hayek suggested that progress in analyzing economic fluctuations would be possible only if the Walrasian equilibrium method could be somehow be extended to accommodate the existence of money, uncertainty, and other characteristics of the real world while maintaining the analytical discipline imposed by the equilibrium method and the optimization principle. It proved to be a task requiring resources that were beyond those at Hayek’s, or probably anyone else’s, disposal at the timePricing is the algebra of arrival uncertainty. Pure cash is the odds making machine Hayek is talking about. Hayek really means optimum congestion, a slight flow compression that is not time equilibriating. I always had Hayek in ind, he got it.
Monday, May 22, 2017
The sandbox does this
Uneasy money talking about aggregate equilibrium:
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