Using and Abusing Economic Theory
AbstractEconomic 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.
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Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 3813.
Date of creation: Mar 2003
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- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
- L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications
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