Rational expectations joke

There is a rational expectations joke that economists like to repeat. It goes like this. Two economists are walking down the street. They come across a $20 bill lying in front of them on the sidewalk. They pause and glare at it. One economist says to other,“Aren’t you going to pick it up?” The other replies,“I would, only the bill can’t really be there. Someone else would already have picked it up.” And they keep on walking. The joke amuses economists because it describes a true-to-life event – finding money on the ground – that they are predisposed to believe is very unlikely.

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