Behavioral
= Behavioral Economics =
by: Eli Brill, Katharine Burmeister, Sharyn Foster, Ludmila Palei, Stacie Smeal
"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." (Akerlof 9)
An Introduction to Economic Theory Before the Behavioral Approach: The Keynesian Approach
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:
2. 1. The independence of consumption and current income.
3. The independence of investment and finance decisions
4. Inflation stability only at the natural rate of unemployment
5. The ineffectiveness of macro-stabilization policy with rational expectations
Bibliography Akerlof, George A. "The Missing Motivation in Macroeconomics". [1]
