A Guide to Economics

An excellent shorthand guide to economics from Dani Rodrik. All 15 suggestions are good, but the final one is the most important:

When economists disagree about policy, it is most often because of
implicit moral and political judgments, rather than economics per se.

For example, we cannot, purely within economics, solve the question of whether taxes should be higher to fund more redistribution (or lower to fund less) than they are at present. There are limiting cases (100% taxation on all incomes over twice median to fund vastly greater payments to the poor…that simply won’t work, as there will be no incomes over twice median to fund such payments.) but most of the debate centres around people arguing about their pre-existing prejudices Bayesian Priors.

People bring in to the debate their ideas on whether there should be more redistribution or not, then support them with the economic arguments that support those ideas.

One response

  1. james C Avatar
    james C

    ‘Bayesian priors’-Another plonker using statistical terms he does not understand.
    Tim adds: Good Grief. It’s a mild little joke started by Chris Dillow (who does understand such things).

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