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    When does one of the central ideas in economics work?

    The concept of equilibrium is one of the most central ideas in economics. It is one of the core assumptions in the vast majority of economic models, including models used by policymakers on issues ranging from monetary policy to climate change, trade policy and the minimum wage. But is it a good assumption? In a forthcoming Science Advances paper, Marco Pangallo, Torsten Heinrich and Doyne Farmer investigate this question in the simple framework of games, and show that when the game gets complicated this assumption is problematic. If these results carry over from games to economics, this raises deep questions about when economics models are useful to understand the real world.

    from Phys.org - latest science and technology news stories https://ift.tt/2tx0vGV

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