An American and a Norwegian economist were awarded the Nobel in economics yesterday for their efforts to demonstrate that innovative technologies and shocks, like a sharp increase in oil prices, play a much greater role in causing booms and recessions than fluctuations in demand.....
There was one catch in their work that has riled a faction of the economics profession. The Prescott-Kydland finding assumed that demand was always at a high level. Everyone who wanted to work did so at the prevailing wage and all production could be sold at the existing market price.
oops. Too many prizes, too few contestants.
Tuesday, October 12, 2004
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment