Whatever your understanding of the economy, how ever you believe it works, if you rely on your belief when you engage in economic activity, then your theory of the world is true.
What remains, then, is to sort the true world-theories by how commonly-held they are. The most commonly held theories describe the way our economy works most of the time.
Perhaps this sounds crazy, but it is no more than what is commonly called "expectations".
No, I don't know if I believe what I just said. But some questions have no better answer.
2 comments:
Your first paragraph sounds like the basic mechanics of revealed preference.
Well, shit, I had to look up "revealed preference". How is it that you know so much terminology (and I don't)?
So, stated preference is what we say, and revealed preference is what we do? Okay, I can live with that.
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