The Endogenous Economist:

. In the social sciences there exist links of communication and influence between the scientists and the actors of the modelled social systems. Social scientists are therefore endogenous parts of the systems which they study. Theories and models shouid be self‐referential. The treatment of information in the rational choice models of the new classical theory, with its core assumption of rational expectations, has stopped short of extending the concept of endogeneity to the economists themselves. Economic theory proceeds on the assumption that it yields the true model and that the actors in the system share this same model even though economists have not yet agreed on this unique model. Moreover, it assumes that economists' disputes about the true model do not prompt the actors of the system to take positions and opt for one or the other of the discussed models. The use of a unique model perspective to interpret the response of financial markets to monetary announcements leads to inconclusive interpretations of the evidence. These findings are better interpreted as the result of multi model competition that has spilled over from academic science to the financial markets themselves.