Imperfect Knowledge Economics develops macroeconomic models that are open to unforeseeable structural change and avoid the presumption that market participants are irrational. This program is also developing econometric methodology that is suitable for testing time-series implications of IKE models.
Taking a long‐run view from economic history, I make three points about instability in financial markets. First, I argue that economic historians have a relatively good understanding of the proximate causes of financial crises. Read more