Ergodicity Econmics as alternative to Behavioural econ.

behavioural economics has been very succesfull in the past decades becuse it ofund fault in the narrow descriptio of the rational man

I understand that ergodicity economics want to relax the narrow ergodicity hypoithesis in economics to show as rational some of those decisions that for behavioural economics where biased and irrational

Probability weighting and Ergodicity Economics

Farmer’s fable (ergodicity economics)

sharing is actually maximizing profit https://www.farmersfable.org/ a cartoon that show how sharing to reduce fluctuation leave both parties better off (on a random walk)

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Homo Ergodicus https://glandfried.github.io/post/homoergodicus/

“Multiplicative process offers a concrete physical advantage in favor of cooperative behavior”

Also, Warren Buffet’s 3 rules in light of ergodicity  (St. Peterburg’s Paradox explained) https://sinaas.blogspot.com/2020/02/warren-buffetts-rules-nr-12-and-3-in.html

brick inflation vs. green inflation

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Central banks have a problem, they can’t create inflation. ECB is the worst plagued by that.

So the Chief Economist Lane suggests to add real estate costs to CPI and pump up inflation accordingly, real estate markets are in a bull run Philip Lane, the ECB’s chief economist, has been even more specific. “We at the ECB would agree that there should be more weight on housing,” Read more at: https://www.bloombergquint.com/gadfly/why-your-housing-costs-matter-to-christine-lagarde-and-the-ecb Copyright © BloombergQuint

ECB Chief Lagarde does not mention inflation at all but only green. Decarbonization would be a great way to add some inflation to the system

A carbon tax is more or less an oil shock where the surplus stay in the domestic economic rather than flying to Saudi Arabia. Carbon tax would make great financial sense if the target is higher inflation (of course it will shock the economy, reallocate resources among economic sectors, offer various option on how to redistribute the increased taxes imagine a carbon dividend for example) So a green oil shock would serve many purposes and open up many dimensions of public policy

Green QE story https://ftalphaville.ft.com/2019/12/17/1576593138000/Green-QE-is-about-more-than-buying-climate-friendly-bonds/