Expectations, Macro-Foundations, Policy Ineffectiveness and Culture-A Methodological Detour

Ineffectiveness and Culture A Methodological Detour Abhay Pethe An attempt has been made in this paper to critically albeit briefly look at the treatment of 'expectations' in mainstream economics. It is argued that RATEX in conjunction with new classical assumptions provide a heady mixture leading to many a nonsensical proposition. A novel way of looking at the micro-macro debate is also suggested. It is pointed out that in the context of modelling dynamic aspects, the crucial aspect of learning (culture constrained or otherwise) has been completely bypassed. The paper to state the obvious has been written in a methodological vein.