Franco Modigliani: Expectation

Franco Modigliani was Italian-American economist. Explore interesting quotes on expectation.
Franco Modigliani: 10   quotes 0   likes

“I believe people can solve complex problems eventually. By repeated trial and error they will get there; but they need a long time. At this point I agree with Herbert Simon. People do not learn immediately, as those rational expectations models seem to imply. I don't believe that.
The statement that assumptions do not matter is nonsense. It is funny. Yes, I assume people are consistent in their behavior. I assume that not because I believe everybody actually is, but because I believe, on the average, you do not get too far from it.”

Franco Modigliani

Conversations with Economists (1983)

People , Behavior , Error , Problem

“Macro rational expectations, as I have labeled the hypothesis, seems to say that expectations in an economist's model must be perfectly consistent with his model that embodies these expectations. In other words, the agents of his model must all share his views of the relevant economic mechanisms, as well as his data. Why? Because if he holds them they must believe they are God's truth and, if so, rational people can have no other views (and of course we should never ask how they would come by these views and data, that not even other specialists may have heard of yet, let alone accepted). I submit that this view is pretty absurd--I would almost say offensive! I certainly believe that I know more about economics and the economy than (almost) everybody else, and i can even prove it: If everybody shared my vies, then the economy could not be in today's troubles”

Franco Modigliani

though it might conceivably be in some different ones!
Conversations with Economists (1983)

God , People , Truth

“The life cycle of family size, at least in the U. S., has a very humped shape rather similar to that of income, though with a somewhat earlier peak. As a result, one might expect, and generally finds a fairly constant rate of saving in the central age group, but lower saving or even dissaving in the very young or old.”

Franco Modigliani

Franco Modigliani, " Life Cycle, Individual Thrift and the Wealth of Nations http://piketty.pse.ens.fr/fichiers/enseig/ecoineg/EcoIneg_fichiers/ModiglianiNobelLecture1985(AER1986).pdf" Lecture to the memory of Alfred Nobel, December 9, 1985, in: Nobel Lectures, Economics 1981-1990, Editor Karl-Göran Mäler, World Scientific Publishing Co., Singapore, 1992.

Life , Age , Family