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Appears in Collections:Economics Journal Articles
Peer Review Status: Refereed
Title: Addressing Uncertainty in Economics and in the Economy
Author(s): Dow, Sheila
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Keywords: uncertainty
open systems
financial behaviour
Issue Date: Jan-2015
Date Deposited: 3-Sep-2014
Citation: Dow S (2015) Addressing Uncertainty in Economics and in the Economy. Cambridge Journal of Economics, 39 (1), pp. 33-47.
Abstract: This paper explores the way in which society in general and economists in particular deal with fundamental uncertainty. It is argued that uncertainty is interdependent with the evolution of institutions and behavior, including that designed to help society cope with uncertainty. While some mainstream theory does address uncertainty, it employs a much narrower concept than fundamental uncertainty. But generally, in spite of the evident increase in fundamental uncertainty during the crisis, most mainstream theory ignores it. While ignoring uncertainty can at times be a successful coping mechanism, it is argued that, as a blanket coping mechanism, ignoring uncertainty seriously limits the realism of theory and therefore also practice and policy. It is concluded that economists should embrace uncertainty by tailoring methodologies and theories to address it. This would provide a more fruitful basis for policy aimed at reducing uncertainty in the economy and also reducing our own uncertainty.
DOI Link: 10.1093/cje/beu022
Rights: This item has been embargoed for a period. During the embargo please use the Request a Copy feature at the foot of the Repository record to request a copy directly from the author. You can only request a copy if you wish to use this work for your own research or private study. Publisher policy allows this work to be made available in this repository. Published in Cambridge Journal of Economics (2015), 39.1, pp.33-47 by Oxford University Press. The original publication is available at:

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