Theory
in sentence
2204 examples of Theory in a sentence
But Keynes’s
theory
was incomplete: his was a
theory
of employment, interest, and money.
It was not a
theory
of prices.
To Keynes’s framework, Friedman added a
theory
of prices and inflation, based on the idea of the natural rate of unemployment and the limits of government policy in stabilizing the economy around its long-run growth trend – limits beyond which intervention would trigger uncontrollable and destructive inflation.
Call it the “porcupine theory.”
Darwin, who developed his
theory
of evolution in Ecuador’s famous Galapagos Islands, recognized the importance of the relationships between species.
We now have more than 40 years of additional data, so I took a look to see if our
theory
still predicts well.
It turns out that our estimates then, if applied to subsequent data, predicted long-term rates extremely well for the 20 years after we published; but then, in the mid-1990s, our
theory
started to overpredict.
The dominant “efficient markets theory” says only that markets reflect what is publicly known, and that it is hard to make money off markets consistently – something verified by the hit that most investor portfolios took in the crisis.
The
theory
does not say that markets cannot plummet if the news is bad, or if investors become risk-averse.
The answer from monetary
theory
is an unambiguous “yes”: give workers a chance to adjust to higher energy prices, allow for some pass-through of higher prices to wages over time (so that wages adjust more gradually), and make clear that inflation will return to its target range within, say, a year or two.
To understand why, we can appeal to game theory, which provides economists and others a powerful framework with which to explain the dynamics of both simple and complex interactions.
On job creation, there is both
theory
and evidence to support the conclusion that the private sector is the main driver of sustainable expansion (which is not to deny that there may be scope for tweaking public policies to make the private sector more employment-friendly).
But on poverty eradication,
theory
and evidence show that policy interventions, when skillfully designed, can play a significant role.
The
theory
of secular stagnation, as advanced by Alvin Hansen and echoed by me, holds that, left to its own devices, the private economy may not find its way back to full employment following a sharp contraction, which makes public policy essential.
Even if we disagree about past political judgements and about the use of the term “secular stagnation,” I am glad that an eminent theorist like Stiglitz agrees with what I intended to emphasize in resurrecting that theory: We cannot rely on interest-rate policies to ensure full employment.
The Hidden Danger of Big DataCAMBRIDGE – In game theory, the “price of anarchy” describes how individuals acting in their own self-interest within a larger system tend to reduce that larger system’s efficiency.
According to the IMF, this “accelerator”
theory
of investment explains most of the weakness of business investment in the developed economies since the 2008 crisis.
As the accelerator
theory
of investment would predict, much R&D investment is occurring in technology-intensive sectors where current and future expected demand has been strong.
In a planned economy like China’s, where policymakers use various tools to influence asset prices, such instability could, in theory, be avoided; indeed, the Marxist view is that government intervention to stop crises is precisely why controlled economies are superior to their free-market counterparts.
To understand the relationship between public debt and economic performance, we should look to the fiscal
theory
of the price level (FTPL), a macroeconomic doctrine that has lately been receiving considerable attention.
In August, at the annual conference of central bankers in Jackson Hole, Wyoming, Princeton’s Christopher Sims provided a lucid explanation of the
theory.
The Club of Rome’s controversial 1972 study Limits to Growth set a new standard for modern, ecologically-inspired catastrophe theory, warning that continued consumption at contemporary levels would lead to “global economic collapse and precipitous population decline.”
The Chilean courts allowed these cases to proceed by stripping Pinochet of his parliamentary immunity and endorsing a legal
theory
to bypass the amnesty.
The International Criminal Court - a tribunal with potential worldwide jurisdiction over genocide, war crimes, and crimes against humanity - is built on a comparable catalytic
theory.
In theory, this approach provides an incentive for the participants to cooperate, as the arrangement’s breakdown would accelerate the depletion that all have agreed to avoid.
(This is an oversimplification that ignores insights into the changing function of brain circuits over time; but it is the basis of the theory.)
Instead of rejecting monetary
theory
and history, the army of Wall Street soothsayers should look beyond the Fed’s press releases and ask themselves: Does it make sense to throw out centuries of experience?
Obama’s problem lies not in his vision for America and the world, but in his deficient efforts to move from
theory
to practice.
In the terminology of modern leadership theory, Trump is deficient in emotional intelligence – the self-mastery, discipline, and empathic capacity that allows leaders to channel their personal passions and attract others.
The New Socialism of FoolsBERKELEY – According to mainstream economic theory, globalization tends to “lift all boats,” and has little effect on the broad distribution of incomes.
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