Knowledge in Economic Models
Long ago I began teaching my students that they should consider knowledge to be like health rather than like wealth. That is, knowledge is not something quantifiable that you can have more of, instead, it is something that can be improved. Being a student of Karl Popper' philosophy science, this distinction seemed obvious. But the quantity-based view of knowledge and learning is so commonplace that it is difficult for most economic model builders to consider any alternative. After all, the quantity-based view of knowledge and learning has been around for 350 years and remains despite is being refuted 200 years ago. In this paper I shall explain why we should stop relying on the long-refuted quantity-based view of knowledge.
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