Seriously, I’m sitting here in a mountain of books and papers trying to explain in equations how firms decide how to set prices, according to a theory hardly anyone believes anymore.

How could anyone seriously think that a firm would use such Keynesian-wierd notation? I understand that to explain and understand reality, we need the help of equations and graphs. But isn’t reality complex enough to make it even more complicated in theory? I thought theory was supposed to be a simplification of reality, not the other way around. But that was perhaps just me.

Time to return to the equations.