Thomas J. Sargent Quotes

There's a very good reason for why economics developed the way it did, and that is that in many situations, the assumption that people will exploit the opportunities available to them is very plausible, and it simplifies the analysis of how markets will behave.

The classical theory of omniscient rationality is strikingly simple and beautiful.

I have not been able in one lecture even to scratch the surface of the role of maximum principles in analytic economics.

If you hear a "prominent" economist using the word 'equilibrium,' or 'normal distribution,' do not argue with him; just ignore him, or try to put a rat down his shirt.

Until the Great Depression, most economists clung to a vision of capitalism as a perfect or nearly perfect system. That vision wasn’t sustainable in the face of mass unemployment, but as memories of the Depression faded, economists fell back in love with the old, idealized vision of an economy in which rational individuals interact in perfect markets.

There is no such thing as quantitative economics.

We have professional economists who can defend any viewpoint with statistics and they do that everywhere in the world.

I practice what has come to be called behavioral economics.

Economists discount any factors that would not influence the thinking of a rational person.

Traditional economics is based on imaginary creatures sometimes referred to as 'Homo economicus.' I call them Econs for short. Econs are amazingly smart and are free of emotion, distraction or self-control problems. Think Mr. Spock from 'Star Trek.'

In the 1940s, economics started getting highly mathematical. It was basically because economists weren't smart enough to write down models of real behavior that they started writing down models of highly rational behavior - and they kind of forgot about humans.

The very name of my subject, economics, suggests economizing or maximizing. But Political Economy has gone a long way beyond home economics.

Play, as a consumers' good, is subject to the law of marginal utility, as are all goods, and the time spent in play will be balanced against the utility to be derived from other obtainable goods.

What is it that the scientist finds useful in being able to relate a positive description of behavior to the solution of a maximizing problem? That is what a good deal of my own early work was about.

If a debt crisis results from government profligacy and mismanagement, rather than from a market failure, it is true that the central bank should not intervene.

The nature of markets, and that includes player acquisition markets, is such that sooner or later any set of successful formulae that provide an excess return above investment are discounted.

It is the business of economists, not to tell us what to do, but show why what we are doing anyway is in accord with proper principles.

Economics is in many respects the queen of the soft sciences. It's expected to be better than the rest. It's my view that economics is better at the multi-disciplinary stuff than the rest of the soft science. And it's also my view that it's still lousy.

I've debated many economists who claim to specialize in risk and probability: when one takes them slightly outside their narrow focus, but within the discipline of probability, they fall apart, with the disconsolate face of a gym rat in front of a gangster hit man.

The modern history of economic theory is a tale of evasions of reality.

An economy may be in equilibrium from a short-period point of view and yet contain within itself incompatibilities that are soon going to knock it out of equilibrium.

When you look at any experimental work not directly related to economics, but trying to test rational behavior in other ways, experiments have conspicuously failed to show rational behavior. Macro evidence certainly suggests deviations from rationality, but I don't want to say the rationality hypothesis is completely wrong. If you have any introspective idea or experimental idea about people's behavior, it seems to be incompatible with the really full scale rational expectations.

So, economics should emulate physics' basic ethos, but its search for precision in physics-like formulas is almost always wrong in economics.

I would never make a good economist. You know, an economist is a man that can tell you anything about — well, he will tell you what can happen under any given condition — and his guess is liable to be as good as anybody else's, too.

When I was a graduate student, estimating and interpreting distributed lags topped the agenda of macroeconomists and other applied economists.