{"id":3407,"date":"2014-12-22T08:21:23","date_gmt":"2014-12-22T13:21:23","guid":{"rendered":"http:\/\/olduvai.ca\/?p=3407"},"modified":"2014-12-22T08:21:23","modified_gmt":"2014-12-22T13:21:23","slug":"the-most-common-error-in-economic-debates","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=3407","title":{"rendered":"The Most Common Error in Economic Debates |"},"content":{"rendered":"

The Most Common Error in Economic Debates |<\/a>.<\/p>\n

The Problem of Contingent Data<\/strong><\/h3>\n

Have you ever been in an argument about whether we should raise taxes and then someone tosses out a real whopper? \u201cThe top tax rate for decades after World War II was over 90% and look how the economy boomed!\u201d<\/p>\n

Or perhaps you read a\u00a0Paul Krugman column<\/a>\u00a0where he said that, \u201cthere\u2019s a big problem with the claim that monetary policy has been too loose: where\u2019s the inflation [he means rising prices]?\u201d<\/p>\n

Both the Internet troll and Professor Krugman are making the same mistake. Let me explain.<\/p>\n

Economists love to use the Latin phrase\u00a0ceteris paribus<\/em>. It means all else being equal. It\u2019s great in a thought experiment. For example, what would happen if we made a change in America today? Suppose we criminalized all use of fossil fuels. We can\u2019t really do that (I hope!) but it can serve a pedagogic purpose.<\/p>\n

It should be pretty obvious that the consequence of shutting off the motors is to shut off production, and people will soon starve. If this isn\u2019t obvious, then you don\u2019t need my blog entry on economic argumentation. You need\u00a0The Moral Case for Fossil Fuels<\/a>\u00a0by Alex Epstein.<\/p>\n

Every economist is aware that in comparing a historical time to the present, or comparing two different countries all else is\u00a0not<\/span><\/strong>\u00a0equal. There is not\u00a0one<\/strong>\u00a0difference between the immediate postwar period and today. There are\u00a0innumerable<\/strong>\u00a0differences. You can\u2019t just assume that the one difference you\u2019re debating is the only one that matters.<\/p>\n

<\/p>\n

<\/a><\/a>…click on the above link to read the rest of the article…<\/span><\/span><\/p>\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

The Most Common Error in Economic Debates |. The Problem of Contingent Data Have you ever been in an argument about whether we should raise taxes and then someone tosses out a real whopper? \u201cThe top tax rate for decades after World War II was over 90% and look how the economy boomed!\u201d Or perhaps […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[2083,244,2085,2084],"class_list":["post-3407","post","type-post","status-publish","format-standard","hentry","category-economics","tag-contingent-data","tag-economics-2","tag-economists","tag-statistics"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/3407","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=3407"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/3407\/revisions"}],"predecessor-version":[{"id":3408,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/3407\/revisions\/3408"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=3407"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=3407"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=3407"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}