Tuesday, December 15, 2009

Paul Samuelson quotes

Piquant Paul Sameulson quotes from a New Yorker interview

He didn’t believe in God, but he knew a devil when he saw one. He insisted that the old economic system—the neoclassical one worked pretty well, except in the Great Depression. That’s a pretty good science. One that is true except for its exceptions.
--On Frank Knight's attitude towards Keynes

The rational expectations paradigm of analysis had nothing to contribute to the Reagan administration, where it would have been welcome, or, indeed, to the Federal Reserve Board’s outside committee of academic consultants, which I used to attend. There was usually one rational expectations man at each meeting, but it was rarely the same one twice. In terms of practical analysis, they had nothing to teach us.
--On the impact of rational expectations

I’m about as rational a person as you could get, but did I set up a sinking fund to pay off my taxes? No. Was I lazy and irrational? No...At bottom, I’m in the Herbert Simon camp of limited rationality. People are rational, but you are always doing things in a hurry and with limited information. The last thing you can do is a big optimization problem down to five decimal places.

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