4 ms·
Economists figured this out long ago. Every person is 100% efficient and rational, and this is why we can predict the future.
by Judgmentality 4y ago
Economists figured this out long ago. Every person is 100% efficient and rational, and this is why we can predict the future.
- deleted 4y ago[deleted]
- astrange 4y agoRational expectations/efficient market hypothesis is the explanation for why we can't predict the future. Predicting it would mean something isn't "priced in". https://someunpleasant.substack.com/p/economists-do-they-know-things-what https://someunpleasant.substack.com/p/economists-do-they-kno...
- Judgmentality 4y agoWell obviously everything is priced in. https://i.redd.it/pd0s2ysxnm791.jpg https://i.redd.it/pd0s2ysxnm791.jpg
- kfarr 4y agoThis is one of the premises behind the United State’s uniquely effective approach to prevent gun violence. Everyone understands the penalty for murder, so no one ever uses a gun for unlawful acts against other humans.
- chii 4y agoI know you're jesting, but in case someone else misunderstands, even if every person is 100% efficient and rational for real, the market is still chaotic and unpredictable. Like the weather system, every molecule of air and water behaves "deterministically". And yet, we can predict no more than a few days, may be a few weeks at most, with any real accuracy. This is the hallmark of a chaotic system (aka the error in prediction grows exponentially).