Lawmakers seem to enact desirable policies, investors seem to make smart choices and the economy grows
Most economists and finance professionals believe that people are “rational.” Perfectly rational! This simple assumption leads to serious misunderstandings on the part of all of the various actors in the economy.
Example 2: Subprime Crisis
[This article has been reproduced with permission from Knowledge Network, the online thought leadership platform for Thunderbird School of Global Management https://thunderbird.asu.edu/knowledge-network/]