A side note about my perspective: I studied economics as an undergrad at a time when the Northwestern "pure rationalism" school of thought completely dominated. Some of the conclusions from purely mathematical models built high on dubious assumptions were ridiculous on their face. But anything outside that dogma was heresy and treated as such. Academics were shunned, careers ruined.
It was a few years later that "behavioral economics" began to make inroads. The moniker of "behavioral economics" itself was to distinguish it from "real economics." Alas (for the establishment), behavioral economics proved very popular, and the genie was out of the bottle. It turns out mathematic equations are not all-powerful when it comes to describing certain phenomena, especially when it comes to individual or collective human behavior.
Collective blind faith in models built on dubious assumptions is what gave us the mortgage crisis.
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A side note about my perspective: I studied economics as an undergrad at a time when the Northwestern "pure rationalism" school of thought completely dominated. Some of the conclusions from purely mathematical models built high on dubious assumptions were ridiculous on their face. But anything outside that dogma was heresy and treated as such. Academics were shunned, careers ruined.
It was a few years later that "behavioral economics" began to make inroads. The moniker of "behavioral economics" itself was to distinguish it from "real economics." Alas (for the establishment), behavioral economics proved very popular, and the genie was out of the bottle. It turns out mathematic equations are not all-powerful when it comes to describing certain phenomena, especially when it comes to individual or collective human behavior.
Collective blind faith in models built on dubious assumptions is what gave us the mortgage crisis.