Behavioral

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"People tend to be happy when they live up to how they think they should be; and they are, correspondingly, unhappy when they fail to live up to those norms." George Akerlof

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An Introduction to Economic Theory Before the Behavioral Approach: The Keynesian Approach

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In his 2006 speech, "The Missing Motivation in Macroeconomics," George Akerlof, a Nobel Prize-winning economist, challenges some ideas about macroeconomics that were established by the well-respected John Maynard Keynes.

The five neutralities discussed by Akerlof are:

• Ricardian equivalence

• 1. The independence of consumption and current income.

• The independence of investment and finance decisions

• Inflation stability only at the natural rate of unemployment

• The ineffectiveness of macro-stabilization policy with rational expectations

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Bibliography Akerlof, George A. "The Missing Motivation in Macroeconomics". [1]