Big Players and the Economic Theory of Expectations

Cover......Page 1
Contents......Page 8
List of Figures......Page 10
List of Tables......Page 11
Preface......Page 12
Acknowledgments......Page 15
Part I. Introduction......Page 18
Expectations and economic theory......Page 20
The role of expectations in economics as a social science......Page 25
Outline of the theory......Page 28
Part II. Methodology......Page 40
Introduction......Page 42
The methodology of Ludwig von Mises......Page 43
Schutz and Hayek......Page 55
3 Schutz......Page 57
4 Hayek......Page 73
Part III. Theory......Page 88
Introduction......Page 90
Language games......Page 91
The economy as a network of language games......Page 100
Coordination does not require common rules......Page 104
Natural selection of language games......Page 109
Entrepreneurship......Page 113
Cognitive expectations......Page 123
Acognitive expectations......Page 130
Hayekian expectations......Page 132
Correlating cognitive and acognitive expectations......Page 135
The general theory of Big Players......Page 137
Modeling Big Players......Page 140
Big Players in asset markets......Page 145
Modeling asset prices in the presence of Big Players......Page 148
Herding and contra-herding as error duration......Page 152
Part IV. Applications......Page 156
The policies of Bunge and Vyshnegradsky......Page 158
The ruble and GARCH......Page 164
R/S analysis......Page 171
9 The Angular Distribution of Asset Returns in Delay Space......Page 181
The compass rose......Page 183
Hypothesis testing with theta histograms......Page 185
A simple simulation of X-skewing......Page 191
Big Players induce X-skewing......Page 194
Money demand and the theory of Big Players......Page 201
The Federal Reserve as a Big Player......Page 204
Discussion and conclusion......Page 210
How this book relates to the emerging new orthodoxy in economics......Page 212
Some suggestions for further work......Page 216
1 What is Verstehen?......Page 221
2 What did Wittgenstein really mean?......Page 225
3 An elementary set-theoretic model of language games......Page 227
4 Notes on reflexivity......Page 229
Notes......Page 235
Bibliography......Page 240
E......Page 254
L......Page 255
R......Page 256
Z......Page 257
C......Page 258
E......Page 259
F......Page 261
L......Page 262
M......Page 263
T......Page 264
X......Page 265