Pursuit of Truthiness

my gut tells me I know economics

Better Living Through Economics

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That is the title of a new book edited by John Siegfried which tells the story of 12 ways in which economists have changed policy and made the world a better place.

I had hoped that it would be accessible to a popular audience so that principles students and others could get an idea of some of the good things economists do.  But most of the chapters involve a lot of techincal jargon and many have math as well.  However, it will be good for economists and advanced economics students to get a sense of what economics can accomplish.  Perhaps more people will be inspired to work on applied policy instead of arid theory.

The most surprising chapter in the book was the one on the draft and the all-volunteer-force.  It turns out that economists were central in both persuading congress to end the draft and in the design of the AVF.

I think the best stories are the ones in which new markets are created.  There it is easiest to see both how big the change was and how involved economists were.  Thanks to the work of economists in doing research and changing policy, we now have auction markets in sulphur dioxide permits and wireless spectrum, and matching markets for school admission, kidney donation, and medical fellowships.  I hope that the future holds much of this “economics as engineering” rather than as a science, social science, or especially as applied math.  In the book’s “overview”, Charles Plott makes the claim that the FCC auction (which economists pushed for and designed) yielded benefits “that far exceed all research funding for economics summed over all of history”.


Written by James Bailey

May 13, 2010 at 4:17 pm

One Response

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  1. […] at the same time that it raised $60 billion for the government. As John Siegfried noted in Better Living Through Economics, this one suggestion brought in more money than the US government has spent on economic research in […]

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