What is Adam Smith's invisible hand idea all about? Why is there a spontaneous order that comes out of the pricing system (according to Smith)? Why did Smith think that banking needed to regulated? How does general equilibrium theory support the idea of the invisible hand? What did later researchers (from the 1970's) find out about general equilibrium theory? How are the assumptions in the Arrow-Debreu model inconsistent with reality? Why did Milton Friedman become so famous and his views on economics so popular? What are the implications of stock returns (or any asset) following a normal distribution? Empirically speaking, are stock price changes on one day independent from the next day's stock price changes? Explain The next questions are from the video "Mind Over Money" The main model of consumer behavior assumes that we never buy anything until we've calculated the impact on, for example, our retirement fund, and we're so good at math we use interest rates to compute our pleasure, over time, after buying something. What was Robert Shiller's response to this? What is the "as if" defense used by Eugene Fama and John Cochrane? How did Richard Thaler refute the "as if" defense with pool? 

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1 Adam Smiths invisible hand idea suggests that individuals pursuing their selfinterest in a free market economy unintentionally promote the greater good of society This occurs because the selfinteres... View the full answer