Journal of Evolutionary Economics

, Volume 15, Issue 1, pp 101–116 | Cite as

Model uncertainty and the rationality of economic policy

An evolutionary approach
Original Paper

Abstract.

This paper examines the process of economic policy-making under conditions of model uncertainty. A median voter model is introduced in which the electorate is uncertain of the policy measures available as well as their respective outcomes and opinion formation is a social process of communication and contagion. Learning from experience is also considered. It is shown that economic policy-making under uncertainty produces novel policy routines, but that a mechanism of efficiently utilising the generated knowledge is missing.

Keywords:

Economic policy Model uncertainty Collective beliefs Collective learning 

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Copyright information

© Springer-Verlag Berlin/Heidelberg 2005

Authors and Affiliations

  1. 1.Faculty of Economics, Department for Public EconomicsPhilipps-University MarburgMarburgGermany

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