Criticism
Although, the more long-lasting impact of this paper has been methodological the Lucas island model fails to prove with empirical evidence the right amount of volatility in output fluctuations caused by a combination of monetary shocks and information limitation as is implied. Also, the assumption of information limitation in the Lucas model is sometimes not evident in real life scenarios.On a more empirical level, there is too little research on imperfect information as a source of price rigidity in models with perfectly flexible prices.
Read more about this topic: Lucas Island Model
Famous quotes containing the word criticism:
“The visual is sorely undervalued in modern scholarship. Art history has attained only a fraction of the conceptual sophistication of literary criticism.... Drunk with self-love, criticism has hugely overestimated the centrality of language to western culture. It has failed to see the electrifying sign language of images.”
—Camille Paglia (b. 1947)
“However intense my experience, I am conscious of the presence and criticism of a part of me, which, as it were, is not a part of me, but a spectator, sharing no experience, but taking note of it, and that is no more I than it is you. When the play, it may be the tragedy, of life is over, the spectator goes his way. It was a kind of fiction, a work of the imagination only, so far as he was concerned.”
—Henry David Thoreau (1817–1862)
“I, with other Americans, have perhaps unduly resented the stream of criticism of American life ... more particularly have I resented the sneers at Main Street. For I have known that in the cottages that lay behind the street rested the strength of our national character.”
—Herbert Hoover (1874–1964)