Chapter 2-Thinking Like an Economist
Chapter 2-Thinking Like an Economist
Chapter 2-Thinking Like an Economist
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Two Roles of <strong>Economist</strong>s<br />
!When they are trying to explain the<br />
world, they are scientists.<br />
!When they are trying to ch<strong>an</strong>ge the<br />
world, they are policymakers.<br />
Positive versus Normative<br />
Analysis<br />
! Positive statements are statements<br />
that describe the world as it is.<br />
!Called descriptive <strong>an</strong>alysis<br />
! Normative statements are<br />
statements about how the world<br />
should be.<br />
!Called prescriptive <strong>an</strong>alysis<br />
Why <strong>Economist</strong>s Agree <strong>an</strong>d<br />
Disagree<br />
! We agree on the methodology,<br />
but not on the underlying<br />
assumptions underlying<br />
incentives <strong>an</strong>d behavior.<br />
!Example-No Child Left Behind<br />
<strong>an</strong>d Test Scores.<br />
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