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Using and abusing economic theory. (English) Zbl 1125.91422

Becker, Ralf (ed.) et al., Contemporary issues in economics and econometrics. Theory and applications. Selected papers based on the presentation at the Australasian meeting of the Econometric Society, ESAM 2002, Brisbane, Australia, July 7–10, 2002. Cheltenham: Edward Elgar Publishing (ISBN 1-84376-617-5/hbk). 3-33 (2004).
Summary: Economic theory is often abused in practical policy-making. There is frequently excessive focus on sophisticated theory at the expense of elementary theory; too much economic knowledge can sometimes be a dangerous thing. Too little attention is paid to the wider economic context and to the dangers posed by political pressures. Superficially trivial distinctions between policy proposals may be economically significant, while economically irrelevant distinctions may be politically important. I illustrate with some disastrous government auctions, but also show the value of economic theory.
For the entire collection see [Zbl 1076.91001].

MSC:

91B99 Mathematical economics
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