Introduction - Thinking like an economist - The economist as a policy adviser

6 important questions on Introduction - Thinking like an economist - The economist as a policy adviser

What is a normative statement?

Claims that attempt to prescribe how the world should be. Based on opinions/morals.

What is a positive statement?

Claims that attempt to describe the world as it is. Based on facts / tests.

Why does the influence of economists on policy go beyond their role as advisers?

Their research and writings often affect policy indirectly.
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Why is an economists' advice not always straight forward?

They know that there is no right answer: trade-offs are involved in most policy decisions.
(Ex: A policy might increase efficiency at the cost of equality. Or it might help future generations but hurt current generations.)

Why is an economists' policy advice not always followed?

There are lots of other considerations to be made; politics, law, press, public relations etc. Economic advice is only one ingredient.

Why do economists often appear to give conflicting advice to policymakers?

- Economists may disagree about the validity of alternative positive theories.
- Economists may have different values and therefore different normative views about what a policy should aim to accomplish.

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