The whole intention of empirical economics is to force theory down to Earth. George Akerlof More Quotes by George Akerlof More Quotes From George Akerlof Some time ago a little-known Scottish philosopher wrote a book on what makes nations succeed and what makes them fail. The Wealth of Nations is still being read today. With the same perspicacity and with the same broad historical perspective, Daron Acemoglu and James Robinson have retackled this same question for our own times. Two centuries from now our great-great- . . . -great grandchildren will be, similarly, reading Why Nations Fail. George Akerlof grandchildren reading book Economic theorists, like French chefs in regard to food, have developed stylized models whose ingredients are limited by some unwritten rules. Just as traditional French cooking does not use seaweed or raw fish, so neoclassical models do not make assumptions derived from psychology, anthropology, or sociology. I disagree with any rules that limit the nature of the ingredients in economic models. George Akerlof economic-models psychology cooking My Swedish grandmother was the daughter of a dairy farmer who lived near Hedemora. My Swedish grandfather worked as a clerk for the Swedish railways in the Stockholm station. George Akerlof farmer who daughter grandfather The only way we are going to ameliorate pressing social needs is through public intervention. George Akerlof going only through way I think what Bob Shiller and I are doing is we're focusing on macroeconomics and the role of psychology in macroeconomics. George Akerlof i-think doing think psychology I've always been a macroeconomist. That's what I teach. And I guess that's what I've been concerned with ever since I've been very young. George Akerlof guess always teach young Keynesian economics has always been needed. George Akerlof been always economics needed When you give chief executives too much compensation in stock options, they concentrate too much on the stock price, and there is a perverse incentive to raise the stock price, particularly when the chief executive wants to exercise his own options. George Akerlof own you too-much exercise When men do all the outside work, they contribute on average about 10 percent of housework. But as their share of outside work falls, their share of housework rises to no more than 37 percent. George Akerlof outside more work men The idea is that in any situation, people have a notion as to who they are and how they should behave. And if you don't behave according to your identity, you pay a cost. George Akerlof you situation identity people My father was a chemist on the Yale faculty, my mother a housewife. George Akerlof housewife yale mother father My mother, whose interest in chemistry was rather minimal, nevertheless went to graduate school in the subject and married my father, for whom it was as important as life itself. George Akerlof mother life father school My brother Carl became a physicist; I became an economist. George Akerlof became economist physicist brother The failure of credit markets is one of the major reasons for underdevelopment. George Akerlof reasons markets credit failure In the late 1960s, the New Classical economists saw the same weaknesses in the microfoundations of macroeconomics that have motivated me. They hated its lack of rigor. And they sacked it. George Akerlof economists new me late Prior to the early 1960s, economic theorists rarely constructed models customized to capture unique institutions or specific market characteristics. George Akerlof market economic capture unique In New Classical theory, periods of declining employment - business cycle downturns - may be caused by an unexpected decline in aggregate demand, which leaves workers mistakenly holding out for nominal wages that exceed the new market-clearing level. George Akerlof new unexpected theory business I would never have been a good reporter because I am not accurate regarding facts. George Akerlof i-am never good facts Parents don't take a baby's temperature to decide whether the room is too warm; likewise, for global warming, we need a story that spurs us to do what is necessary. George Akerlof parents story global-warming baby
