Soon economists may call the government to fix the economy, leaving the public confused..

Noah Smith has this interesting piece on changing discourse on economic thought. And that too amidst economists!!

Even more interesting is that they seem to be leaning more towards govt these days:

Economists argue so much about everything that people are always asking them “Is there anything you folks agree on?” The usual stock response is “free trade.” But when Stanford economics professor Jon Levin took the question on Quora, he gave a very different answer:

Virtually all economists agree with the principle that externalities should be taxed and tend to see externality taxes (or “Pigovian” taxes after the economist Arthur Pigou) as quite natural.

This might seem like a dry, scholarly response, but for those of us who watch the econ profession, it is eye-opening. This is the first time I’ve seen a professor at a top school cite government intervention in the economy as the main example of agreement in the field.

Many people associate economists with support for free markets. There is some truth to the stereotype. On the issue of international trade, economists definitely tend to favor less government intervention than the average person, at least in the U.S. But on many issues, economists are actually more likely than the general public to summon the guiding hand of the state.

In a 2013 paper, economists Paola Sapienza and Luigi Zingales compared a survey of the general public to a poll of top academic economists. Both surveys are administered by the University of Chicago’s Booth School of Business. While they found substantial disagreement between economists and the general public, it was definitely not the case that normal folks were more interventionist than the experts.

Bloody hell for this..

He points to more such evidences where they seem to be leaning towards govt.

In the end, he sums up nicely:

Eventually, though, the public will realize that economists are not the knee-jerk free-marketers that many imagine.  Even on international trade, the elite consensus shows a few signs of fraying at the edges. Soon we may enter an age when economists call on the government to fix the economy, and the average American is the one who needs convincing.

One only remembers a saying in Hindi – “Nau sau chuhe khakar billi haj ko chali”. For translation and understanding in english see this.. 🙂

One Response to “Soon economists may call the government to fix the economy, leaving the public confused..”

  1. Says:

    Reblogged this on Forwardeconomics.

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