Game Theory 101: What is a Nash Equilibrium?Submitted by Cyril on Thu, 03/20/2014 - 03:42
By Game Theory 101 :
More on John Forbes Nash, Jr. :
Nash Equilibrium :
Nobel winner Nash critiques economic theory (2005) :
"[...] Nash’s lecture, “Ideal Money and Asymptotically Ideal Money,” centered on the connection between fluctuation in inflation and exchange rates and the perceived long-term value of money.
“Good money,” he argued, is money that is expected to maintain its value over time. “Bad money” is expected to lose value over time, as under conditions of inflation. [...]"
Nash responded with caution to the suggestion from an audience member that a system of currencies approaching perfect stability would ultimately produce a system with only one world currency.
“There’s nothing wrong with it,” Nash said. But he added, “In practice, I’m a little distrustful of the politicians at the level of the United Nations and elsewhere,” who would be in charge of administering a world currency.
Nash framed his argument as a critique of Keynesian economic theory, which allows the use of inflationary monetary policy as a tool to stimulate the economy during times of recession. This acceptance of small increases of inflation, he said, can allow inflation to spiral in the long run [...]