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Except, reliably, economies crash deeply and result in war.
Results from economics that fail to model reality is simply discarding an inadequate model.
The "science" of Economics assumed that people act rationally, and this Nobel Prize was awarded to someone who said they don't. Good for him, I wish him well, but anyone with a modicum of mathematics ability only has to watch how people react to massive lottery prizes (with even more massive odds against winning) to understand that people don't act rationally.
Strictly speaking neo-classical economics argues that assuming people act rationally provides the best model from which to predict most economic behaviour, regardless of the fact that this is not a valid assumption in the real world. Whilst behavioural economics does add to our understanding, discarding all the results of economics because the underlying assumption is simplistic is a big mistake; in the West we fail to realise how much economics has enabled the massive decline in absolute poverty over the past 30 years because it hasn't made a lot of difference here, and the 2007 crash was traumatic. The truth is we need to be VERY cautious about discarding the bairn with the waste water...
Behavioral bias? What behavioral bias?
Hey, anyone want to buy some lovely tulips?
"how people react to massive lottery prizes (with even more massive odds against winning) to understand that people don't act rationally."
At most lottery prize levels, "investing" in a ticket has a negative present value. Buying such a ticket surely is an irrational choice. Where it gets interesting is when the lottery prize is large enough for the the present value to be positive. That's definitely rare ... but not unheard of.
It baffles me that people say this sort of thing when it's an easily-checked, factual statement and is wrong.
The treasury make this exact data publicly available. Real (i.e. inflation adjusted) rates have been positive every day since 2000, apart from a few months in 2012/13 when they hovered around zero.
When governments ‘print money’, lend money at negative interest rates, do not balance their budgets, or a number of other actions to cover their efforts to stimulate the economy they last place to have money is a government bond. The only time bond interest will exceed inflation is if the government makes an effort to balance its budget. Sixty years ago where I live the minimum wage was 80 cents an hour. Because of inflation the same unit of labour has been raised to 15 dollars. This is a major reason investors favour the stock market and property and ignore the advice of experts.