No, it depends on the authority. Being rational means giving appropriate weight to the opinions of other people and these peoples’ education has some impact on the optimal weights. Also, you did ask the personal question “How do you know?” and I interpreted this as your wondering how I, James Miller, acquired my knowledge of financial markets.
you did ask the personal question “How do you know?” and I interpreted this as your wondering how I, James Miller, acquired my knowledge of financial markets.
A bit of miscommunication, then, my question referred to the quote directly preceding it which is
since you would likely conclude after lengthy study that yes, one should just buy index funds
I meant “How do you know that I would likely conclude after lengthy study that yes, one should just buy index funds?”
If you read LW you are likely the kind of person who, after massive study, would agree with economists on microeconomic issues on which most economists agree because microeconomics is really math and logical reasoning applied to human behavior and economists are, relative even to the LW population, good at these things.
If you read LW you are likely the kind of person who, after massive study, would agree with economists on microeconomic issues
Let me provide a data point for you: I have studied this issue sufficiently well. I have NOT come to the conclusions which you expect.
microeconomics is really math and logical reasoning applied to human behavior
Yes, but badly applied :-D Economics is only starting to realize that actual live humans are not Homo economicus and that equilibrium models of systems with omniscient fully rational agents driven solely by the desire to have more money are not much like the real world.
Once economists leave the rarefied atmosphere of DSGE models and such and have to deal with the reality-provided empirical data, they can hardly agree on anything. A recent case in point—the Piketty book.
No, it depends on the authority. Being rational means giving appropriate weight to the opinions of other people and these peoples’ education has some impact on the optimal weights. Also, you did ask the personal question “How do you know?” and I interpreted this as your wondering how I, James Miller, acquired my knowledge of financial markets.
A bit of miscommunication, then, my question referred to the quote directly preceding it which is
I meant “How do you know that I would likely conclude after lengthy study that yes, one should just buy index funds?”
If you read LW you are likely the kind of person who, after massive study, would agree with economists on microeconomic issues on which most economists agree because microeconomics is really math and logical reasoning applied to human behavior and economists are, relative even to the LW population, good at these things.
Let me provide a data point for you: I have studied this issue sufficiently well. I have NOT come to the conclusions which you expect.
Yes, but badly applied :-D Economics is only starting to realize that actual live humans are not Homo economicus and that equilibrium models of systems with omniscient fully rational agents driven solely by the desire to have more money are not much like the real world.
Once economists leave the rarefied atmosphere of DSGE models and such and have to deal with the reality-provided empirical data, they can hardly agree on anything. A recent case in point—the Piketty book.