|Angus Armstrong||Keynote Address||
Ever since homo sapiens began walking the earth 200,000 years ago, we have acted together in groups. In the face of uncertainty, we have relied on our groups to contextualise and understand novel situations through our shared histories and customs. The idea that we are only self-interested is rejected in history and many experiments in a social context. Our insistence on individualism in macroeconomic models is problematic, and the consequence of making policy in the image of a perfectly competitive economy is contrary to our instincts. Direct interactions have to be put in the centre of our models, rather than through anonymous markets. Coordination failures in economic and social policy become sharper through this lens. I illustrate with some research from the ESRC’s Rebuilding Macroeconomics network.
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