Social Perception and Social Reality (Jussim 2012) reviews the evidence in social psychology and related fields and reaches three conclusions: (1) Although errors, biases, and self-fulfilling prophecies in person perception are real, reliable, and occasionally quite powerful, on average, they tend to be weak, fragile, and fleeting. (2) Perceptions of individuals and groups tend to be at least moderately, and often highly accurate. (3) Conclusions based on the research on error, bias, and self-fulfilling prophecies routinely greatly overstate their power and pervasiveness, and consistently ignore evidence of accuracy, agreement, and rationality in social perception. The weight of the evidence – including some of the most classic research widely interpreted as testifying to the power of biased and self-fulfilling processes – is that interpersonal expectations relate to social reality primarily because they reflect rather than cause social reality. This is the case not only for teacher expectations, but also for social stereotypes, both as perceptions of groups, and as the bases of expectations regarding individuals. The time is long overdue to replace cherry-picked and unjustified stories emphasizing error, bias, the power of self-fulfilling prophecies, and the inaccuracy of stereotypes, with conclusions that more closely correspond to the full range of empirical findings, which includes multiple failed replications of classic expectancy studies, meta-analyses consistently demonstrating small or at best moderate expectancy effects, and high accuracy in social perception.

This paper distinguishes two kinds of endogenous business cycle models: EBC1 models, which display dynamic indeterminacy, and EBC2 models, which display steady-state indeterminacy. Both strands of the literature have their origins in the sunspot literature that developed at the University of Pennsylvania in the 1980s. I argue that EBC1 models are part of the evolution of modern macroeconomics that has classical roots dating back to the 1920s. EBC2 models provide a microfoundation for one of the most important ideas to emerge from Keynes's (1936) General Theory of Employment, Interest and Money: that high involuntary unemployment can persist as part of the steady-state equilibrium of a market economy.