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.
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Paper provided by Economics Group, Nuffield College, University of Oxford in its series Economics Papers with number
2003-W02.
Find related papers by JEL classification: A11 - General Economics and Teaching - - General Economics - - - Role of Economics; Role of Economists B4 - Schools of Economic Thought and Methodology - - Economic Methodology D44 - Microeconomics - - Market Structure and Pricing - - - Auctions L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications
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