Views: 0 Author: Site Editor Publish Time: 2021-08-31 Origin: Site
From whether to invest in expanding a company, whether to buy a house, to whether to spend a few years studying for a certain degree, economists believe that expectations have an important impact on people's decision-making. John Maynard Keynes described the expected role as an "animal spirit." Mainstream economics often assumes "rational expectations", that is, people will not make systemic mistakes when predicting future conditions.
Regardless of the theory adopted, what we expect to happen in the economy in the future will influence the decisions we make today-and these decisions will in turn affect the future. This is particularly important in 2021, because many developed countries are preparing to restart the economy after the vaccination work is completed.
However, history also plays an important role in economic decision-making, and evidence shows that its impact is very long-term.
For example, the road network built by the Roman Empire can still explain to a large extent the economic geography and trade pattern of Europe today. Similarly, the history of populism in a country can be used to effectively predict the future of populism in that country. Considering this kind of law, how likely is it to change the current trajectory?
The economist Paul Krugman argued a few years ago that the balance between looking back at past glory and optimistic about the future will determine the possible growth rate of an economy. People's expectations of the economy, whether rational or animal, are self-fulfilling.
