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The Scope and Method of Applied Policy Economics

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  • David Colander

Abstract

Much has been written about the methodology of economic science. Little has been written about the methodology of applied economics, and most applied economists think of applied economics as subject to a scientific methodology. But, as Classical economists recognized long ago, that cannot be correct as the methodology of science is designed to minimize the integration of values, while applied policy analysis requires the integration of values into the analysis, ideally in as transparent ways as possible. This article suggests that applied policy economics should consciously follow an engineering, not a scientific, methodology because engineering methodology allows for the conscious blending of philosophical methodology, used to arrive at consensus on values, with scientific methodology used to arrive at consensus on scientific facts and understanding. JEL Classifications : B40, B41, A12, A13

Suggested Citation

  • David Colander, 2018. "The Scope and Method of Applied Policy Economics," The American Economist, Sage Publications, vol. 63(2), pages 132-146, October.
  • Handle: RePEc:sae:amerec:v:63:y:2018:i:2:p:132-146
    DOI: 10.1177/0569434518783386
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    References listed on IDEAS

    as
    1. David Colander, 2014. "The Economics of Influence," Journal of Economic Issues, Taylor & Francis Journals, vol. 48(2), pages 485-492.
    2. Abram Bergson, 1954. "On the Concept of Social Welfare," The Quarterly Journal of Economics, Oxford University Press, vol. 68(2), pages 233-252.
    3. Friedman, Milton, 1966. "Essays in Positive Economics," University of Chicago Press Economics Books, University of Chicago Press, number 9780226264035, November.
    4. David Colander, 2018. "Retrospectives: The Lost Art of Economics," Chapters, in: How Economics Should Be Done, chapter 3, pages 25-32, Edward Elgar Publishing.
    5. David Colander, 2007. "Edgeworth's Hedonimeter and the Quest to Measure Utility," Middlebury College Working Paper Series 0723, Middlebury College, Department of Economics.
    6. Robbins, Lionel [Lord], 1981. "Economics and Political Economy," American Economic Review, American Economic Association, vol. 71(2), pages 1-10, May.
    7. repec:hrv:faseco:33445961 is not listed on IDEAS
    8. David C. Colander & Huei-Chun Su, 2018. "How Economics Should Be Done," Books, Edward Elgar Publishing, number 17588.
    9. David Colander, 2007. "Retrospectives: Edgeworth's Hedonimeter and the Quest to Measure Utility," Journal of Economic Perspectives, American Economic Association, vol. 21(2), pages 215-226, Spring.
    10. Alvin E. Roth, 2002. "The Economist as Engineer: Game Theory, Experimentation, and Computation as Tools for Design Economics," Econometrica, Econometric Society, vol. 70(4), pages 1341-1378, July.
    11. Keynes, John Neville, 1890. "The Scope and Method of Political Economy," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, edition 4, number keynes1890.
    12. Elliott Peranson & Alvin E. Roth, 1999. "The Redesign of the Matching Market for American Physicians: Some Engineering Aspects of Economic Design," American Economic Review, American Economic Association, vol. 89(4), pages 748-780, September.
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    Cited by:

    1. Tobón Arias, Alexander, 2022. "La estructura lógica de la teoría del equilibrio general dinámico estocástico," Borradores Departamento de Economía 020477, Universidad de Antioquia - CIE.

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    More about this item

    Keywords

    methodology; values; applied policy; engineering; normative;
    All these keywords.

    JEL classification:

    • B40 - Schools of Economic Thought and Methodology - - Economic Methodology - - - General
    • B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology
    • A12 - General Economics and Teaching - - General Economics - - - Relation of Economics to Other Disciplines
    • A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values

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