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Economic Measurement and the Bias in Policy Choice

Author

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  • Myles, G.D.

Abstract

The level of economic activity is never measured perfectly because of the problems of definition, inaccuracies in data collection and the existence of the hidden economy. Such mismeasurement implies that government policies based on official statistics can be optimal only by chance. The analysis formalises this observation in a two-sector economy and attempts to quantify the direction and extent of the bias introduced into policy by the failure to account for the true size of the economy.

Suggested Citation

  • Myles, G.D., 1995. "Economic Measurement and the Bias in Policy Choice," Discussion Papers 9511, Exeter University, Department of Economics.
  • Handle: RePEc:exe:wpaper:9511
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    References listed on IDEAS

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    1. Guermat, C. & Hadri, K., 1999. "Heteroscedasticity in Stochastic Frontier Models: a Monte Carlo Analysis," Discussion Papers 9914, Exeter University, Department of Economics.
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    3. B. E. Bravo-Ureta & L. Rieger, 1990. "Alternative Production Frontier Methodologies And Dairy Farm Efficiency," Journal of Agricultural Economics, Wiley Blackwell, vol. 41(2), pages 215-226.
    4. Kaddour Hadri, 1997. "A frontier approach to disequilibrium models," Applied Economics Letters, Taylor & Francis Journals, vol. 4(11), pages 699-701.
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    8. Dawson, P J, 1987. "Farm-Specific Technical Efficiency in the England and Wales Dairy Sector," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 14(4), pages 383-394.
    9. Battese, George E. & Corra, Greg S., 1977. "Estimation Of A Production Frontier Model: With Application To The Pastoral Zone Of Eastern Australia," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 21(03), December.
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    More about this item

    Keywords

    ECONOMIC POLICY;

    JEL classification:

    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance

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