Roman Frydman: What Can Economists Know? 4/5

The video discusses the limitations of the core axiom in contemporary economics, which assumes that economic outcomes can be fully specified by causal factors. The speaker critiques this axiom, arguing that it leads to unrealistic models and anomalies. A simple model of asset prices is presented to illustrate these points. The video also explores rational expectations and critiques the assumptions underlying economic models. Behavioral economics is discussed, highlighting the need for a more realistic understanding of human behavior. The speaker concludes by suggesting future directions for economic research.

What new insight or understanding did you gain from this video?