Information and the Change in the Paradigm in Economics, Part 2

  title={Information and the Change in the Paradigm in Economics, Part 2},
  author={J. E. Stiglitz},
  journal={The American Economist},
  pages={17 - 49}
  • J. Stiglitz
  • Published 1 March 2004
  • Economics
  • The American Economist
ditional Keynesian explanations, in particular, the lack of micro-foundations. This gave rise to two schools of thought. One sought to use the old per fect market paradigm, relying heavily on represen tative agent models. While information was not per fect, expectations were rational. But the representative agent model, by construction, ruled out the information asymmetries which are at the heart of macro-economic problems. Only if an indi vidual has a severe case of schizophrenia is it pos… 

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