search query: @indexterm Neo-classical economics / total: 22
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| Author: | Tabarrok, A. |
| Title: | Irrelevance propositions are irrelevant |
| Journal: | Kyklos
1995 : VOL 48, p. 409-417 |
| Index terms: | ECONOMICS MONETARY ECONOMICS POLITICAL ECONOMY NEO-CLASSICAL ECONOMICS |
| Language: | eng |
| Abstract: | Ricardian equivalence theory and other New-Classical neutra- lity results have generatied an enormous debate because they appear to have strong implications for policy. I argue that irrelevance propositions are policy irrelevant. If these propositions are true then behaving as if they are false has zero costs but, if they are false, behaving as if they are true may be very costly. Thus, even if we believe these propositions to be true, we should behave as if they are false. In consequence, we should not be overly concerned with whether these propositions are in fact true. An interesting corollary of the above arguments is that if irrele- vance propositions are believed to be true much evidence will exist which suggests that they are false. |
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