Behavioral
Behavioral Economics
George Akerlof (Katie), a Nobel Prize-winning economist, disputes established Keynesian economic theory in his 2006 speech, "The Missing Motivation in Macroeconomics".
The five neutralities discussed by Akerlof are
1. The independence of consumption and current income (Katie)
2. The independence of investment and finance decisions (Eli)
3. Inflation stability only at the natural rate of unemployment (Stacie)
4. The ineffectiveness of macro-stabilization policy with rational expectations (LUDA, this is the only one left, it's yours)
5. Ricardian equivalence, which Professor McPhail does not agree with, so we're not going to discuss.
6. Historical background of Keynesian Model (Sharyn)
Akerlof addresses the neutrality of consumption and current income. Keynes argues that an individual will make economic decisions based on current income. However, Akerlof's research suggests that an individual will consider other things occurring in their lives, also.
1. The independence of consumption and current income (Katie)
2. The independence of investment and finance decisions (Eli)
