> it makes a philosophical error in that it assumes people and economic agents are inert objects to be studied as you would chemicals or atoms, without the capacity to react and respond to economic "laws" thereby changing them.
This is literally the foundation of macroeconomics AFTER Keynes. This is (one of several) reasons why Keynesianism was rejected.
Every single macroeconomist in every mainstream department in the country (and everyone in a central bank anywhere) would agree with exactly what you said AND say that it is precisely that fact which makes macroeconomics really hard.
This is why, for example, even the bare-bones simplest macroeconomic model you learn in your first year graduate macro class must include some notion of the agents' expectations.
It would be an error if we didn't do that. But fortunately, it's been at least 50 years since we started thinking about exactly that problem.
This is literally the foundation of macroeconomics AFTER Keynes. This is (one of several) reasons why Keynesianism was rejected.
Every single macroeconomist in every mainstream department in the country (and everyone in a central bank anywhere) would agree with exactly what you said AND say that it is precisely that fact which makes macroeconomics really hard.
This is why, for example, even the bare-bones simplest macroeconomic model you learn in your first year graduate macro class must include some notion of the agents' expectations.
It would be an error if we didn't do that. But fortunately, it's been at least 50 years since we started thinking about exactly that problem.