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Folk Economics

Author

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  • Paul H. Rubin

    () (Department of Economics, Emory University)

Abstract

Folk economics is the intuitive economics of untrained people. It is concerned with distribution, and does not allow for or understand incentives. Folk economic notions evolved in our ancestors in circumstances where there was little in the way of specialization, division of labor, capital investment, or economic growth. It can explain the beliefs of naïve individuals regarding matters such as international trade, labor economics, law and economics, and industrial organization. It is important that voters understand economic principles. Economists would do a better job of persuading others and of teaching if we paid explicit attention to folk economics. Because untrained individuals do not fully understand gains from trade, training in economics is likely to improve welfare by increasing the number of trading opportunities. There is evidence that this is in fact true.

Suggested Citation

  • Paul H. Rubin, 2003. "Folk Economics," Southern Economic Journal, Southern Economic Association, vol. 70(1), pages 157-171, July.
  • Handle: RePEc:sej:ancoec:v:70:1:y:2003:p:157-171
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Common sense, economics, and beliefs
      by Matt Nolan in TVHE on 2014-08-07 00:20:55

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    Cited by:

    1. Bryan Caplan & Edward Stringham, 2005. "Mises, bastiat, public opinion, and public choice," Review of Political Economy, Taylor & Francis Journals, vol. 17(1), pages 79-105.
    2. Levy, Daniel & Snir, Avichai, 2017. "Potterian Economics," MPRA Paper 76344, University Library of Munich, Germany.
    3. Sacha Bourgeois-Gironde & David Leiser & Rinat Benita, 2010. "Human Foibles or Systemic Failure -- Lay Perceptions of the 2008-09 Financial Crisis," Post-Print ijn_00445611, HAL.
    4. Daniel Klein, 2010. "From weight watchers to state watchers: Towards a narrative of liberalism," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 23(4), pages 403-410, December.
    5. Michael R. Powers, 2009. "Constant-sum sampling: an apology for statistics' “original sin”," Journal of Risk Finance, Emerald Group Publishing, vol. 10(4), pages 317-320, August.
    6. Haferkamp, Alexandra & Fetchenhauer, Detlef & Belschak, Frank & Enste, Dominik, 2009. "Efficiency versus fairness: The evaluation of labor market policies by economists and laypeople," Journal of Economic Psychology, Elsevier, vol. 30(4), pages 527-539, August.
    7. Carrie B. Kerekes, 2011. "Property Rights and Environmental Quality: A Cross-Country Study," Cato Journal, Cato Journal, Cato Institute, vol. 31(2), pages 315-338, Spring/Su.
    8. Gehring, Kai, 2013. "Who Benefits from Economic Freedom? Unraveling the Effect of Economic Freedom on Subjective Well-Being," World Development, Elsevier, vol. 50(C), pages 74-90.
    9. Daniel Klein & Xiaofei (Sophia) Pan & Daniel Houser & Gonzalo Schwartz, 2011. "Experiment on the Demand for Encompassment," Working Papers 1020, George Mason University, Interdisciplinary Center for Economic Science, revised Mar 2011.
    10. Klein, Daniel, 2004. "The People’s Romance: Why People Love Government (as much as they do)," Ratio Working Papers 31, The Ratio Institute, revised 11 May 2005.
    11. Jacob, Robert & Christandl, Fabian & Fetchenhauer, Detlef, 2011. "Economic experts or laypeople? How teachers and journalists judge trade and immigration policies," Journal of Economic Psychology, Elsevier, vol. 32(5), pages 662-671.
    12. repec:ejw:journl:v:14:y:2017:i:1:p:61-76 is not listed on IDEAS
    13. repec:ejw:journl:v:12:y:2015:i:2:p:114-136 is not listed on IDEAS

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