Wednesday, January 29, 2020

What is the most useful idea in economics?


Five economists answer the question, “What is the most useful idea in economics?
  1. Opportunity cost
  2. Decisions are best made incrementally
  3. Comparative advantage
  4. Causal inference
  5. Lump of labor fallacy
I would consider a few other answers.

  1. Incentives 
  2. Unintended consequences
  3. Institutions matter
  4. Failures occur in both markets and governments

I think the best answer is "Economic Reasoning". Economic reasoning subsumes many of the other answers.

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