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A theory is appropriate as long as it fits into the fact; when a theory doesn't fit in the fact, it's wise to walk with the fact.

Monday, October 18, 2010

The X Factor of Economics: People

An interesting article by David Segal from the New York Times about why do economists often disagree. Thanks to Professor G. Mankiw for sharing the article in his blog!

Probably the following paragraph from the article can explain the reason most wisely.

But economics will forever have to contend with the biggest X factor of all: people. As Mr. Solow notes, you feed people poison, and they die. But feed them a subsidy and there is no telling what will happen. Some will use it wisely, others perversely and some a mix of both.

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