Using and Abusing Economic Theory

Paul Klemperer

No 2003-W02, Economics Papers from Economics Group, Nuffield College, University of Oxford

Abstract: 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.

JEL-codes: A11 B4 D44 L96 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2002-12-01
New Economics Papers: this item is included in nep-hpe, nep-mic and nep-pke
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Citations: View citations in EconPapers (7)

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Working Paper: Using and Abusing Economic Theory (2003)
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Persistent link: https://EconPapers.repec.org/RePEc:nuf:econwp:0302

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