Irrelevance Propositions Are Irrelevant

Alexander Tabarrok ()

Kyklos, 1995, vol. 48, issue 3, pages 409-17

Abstract: New-Classical neutrality results have generated an enormous debate because they appear to have strong implications for policy. The author argues that irrelevance propositions are policy irrelevant. If these propositions are true, then behaving as if they are false has zero costs; but if they are false, behaving as if they are true is costly. Thus, even if we believe these propositions to be true, we should behave as if they are false. Implications of this view of policy for optimal research programs and testing of neutrality results is discussed. Copyright 1995 by WWZ and Helbing & Lichtenhahn Verlag AG

Date: 1995

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