Philosophy Dictionary of ArgumentsHome
| |||
|
| |||
| Expectations: Expectations are cognitive anticipations about future events or outcomes, influencing perception and behavior. They shape individual experiences by guiding attention, interpretation, and emotional responses. Expectations can be formed through past experiences, social influences, and cognitive processes, impacting decision-making and overall well-being. See also Experience, Perception, Behavior, Decisions._____________Annotation: The above characterizations of concepts are neither definitions nor exhausting presentations of problems related to them. Instead, they are intended to give a short introduction to the contributions below. – Dictionary of Arguments. | |||
| Author | Concept | Summary/Quotes | Sources |
|---|---|---|---|
|
Economic Theories on Expectations (Economics) - Dictionary of Arguments
Landsburg I 40 Expectation/Unemployment/Economic theories/Landsburg: One key lesson that economists and policymakers took to heart was that it makes no sense to ask, for example, "What will happen to employment if we increase the money supply this year by 5 percent?" The answer could be anything at all, depending on what people expect. >Unemployment/Friedman, >Inflation. If prices rise by 5 percent when people are expecting 10 percent, they tend to be surprised by how Iow their wage offers are, and a lot of them turn down jobs as a result. If prices rise by 5 percent when people are expecting 2 percent, you might get a boom in employment. Instead, the right conclusion is that a coherent monetary policy must be a long-run policy - one that takes into account how each year's changes affects the following years' expectations. Moreover, it's highly desirable for the authorities to manage expectations, by making clear commitments to policy rules, and developing a reputation for transparency. Natural rate of unemployment/Friedman: Friedman went on to hypothesize that there is a natural rate of unemployment arising from the fact that we live in a changing and uncertain world, where there will always be some people who prefer to be temporarily unemployed in order to search for a better job or go back to school or deal with family emergencies. Any attempt to use inflation to drive unemployment below that natural rate is doomed to fail, at least in the long run, and is probably not doing anyone any favours even during the brief interval in which it appears to succeed.* This natural rate hypothesis is now one of the central tenets of macroeconomics. Government policy/Taxation: The implications of the natural rate hypothesis go far beyond monetary theory. In 1976,the US Congress passed the Humphrey-Hawkins Full Employment Bill, authorizing the government to create as many jobs as necessary to keep the unemployment rate below 3 percent. Problems: The problem with this is that in order to hire people, the government must pay them. In order to pay them, it must either raise taxes or increase borrowing. Either way, there is less income in private hands. One way or another, private employment must fall. >Unemployment/Government policy. * The natural rate can change, and will if someone finds a better way to match workers to jobs or if training programs become more effective. Friedman's point is that you can't change the natural rate of unemployment by changing the money supply. >Money supply/Friedman._____________Explanation of symbols: Roman numerals indicate the source, arabic numerals indicate the page number. The corresponding books are indicated on the right hand side. ((s)…): Comment by the sender of the contribution. Translations: Dictionary of Arguments The note [Concept/Author], [Author1]Vs[Author2] or [Author]Vs[term] resp. "problem:"/"solution:", "old:"/"new:" and "thesis:" is an addition from the Dictionary of Arguments. "Vs" indicates differences in content, not necessarily the chronological progression of a controversy. If a German edition is specified, the page numbers refer to this edition. |
Economic Theories Landsburg I Steven E. Landsburg The Essential Milton Friedman Vancouver: Fraser Institute 2019 |
||
> Counter arguments against Economic Theories
> Counter arguments in relation to Expectations (Economics)
