The Correspondence Principle and Its Critics

The E-Correspondence Principle

We present a new application of Samuelson’s Correspondence Principle to the analysis of comparative dynamics in stochastic rational expectations models. Our version, which we call the E-correspondence principle, applies to rational expectations equilibria that are stable under least squares and closely related learning rules. With this technique it is sometimes possible to study, without explic...

Correspondence Principle

The Correspondence Principle is the relation, which exists in certain economic models, between comparative statics of equilibria and the properties of out-of-equilibrium dynamics. The Correspondence Principle (CP) implies that one obtains unambiguous comparative statics by selecting equilibria with desirable dynamic properties. Generally, the CP determines comparative statics in models with a o...

Democracy and Its Critics

The Efficient Market Hypothesis and Its Critics

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Keynes' Law and Its Critics*

Keynes' Law and Its Critics. Critics of Keynes' "fundamental psychological law" that the rate of current consumption declines with increases in current income claimed it was incomplete, produced incorrect predictions and emphasized the wrong spending behavior. These objections involve confusion over the effects of individual and average data on spending estimates. When data types are carefully ...