lecture22 - Economics 103 Lecture # 22 Candide A last...

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Economics 103 Lecture # 22 Candide A last chance to preach.
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Do you remember on the first day when I said: This will either be the best or worst course you ever take. Because it is a course about thinking like an economist … not a course about economics. I hope you agree that I was telling the truth.
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Economics is a systematic way of looking at the world, and interpreting what is around you. You have to think about the world some way. There’s no such thing as an open mind. Suppose you thought All swans were white. If you saw 10 of 11 swans, and they all were white, you would take this as evidence confirming your belief.
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You would believe very strongly that the 11 th swan was white. But suppose you believed there is always one black swan. When you see ten white swans, you are convinced the next one will be black! Same evidence, but each draws a different conclusion based on their beliefs. So it is with social science. We interpret the world around us anyway … … we might as well use the right way.
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Another example, punctuate the following words: woman without her man is a savage Did you write: Woman, without her man, is a savage. Or did you write: Woman! Without her, man is a savage. How you approach a problem hinges on what theoretical background you bring to that problem.
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Many years ago I was interviewed in a magazine and said the following: “Economist Doug Allen reports that the Canadian welfare rate structure increases the probability of single parenthood, births out of wedlock, and divorce. `What is perhaps most surprising here,’ commented Prof. Allen, `is not that women … would respond this way, but rather how sesitive this response is to relatively minor changes in benefits.’ … an annual increase of $1000 would result in an increase of about 100,000 Canadian women on welfare.”
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The following week there was a letter to the editor: Your Feb. 17 cover story, and the poor bashing expert referred to in it, were an insult to all persons possessing compassion and intelligence. For miserly so-called “economic reasons” you vilify the welfare-recipient for claiming his birthright. You and your fascist, bigoted, poor-bashing moan about a piddling amount of money as though it were some great wasteful expense. Shame on your economic myopia and lack of sensitivity. It’s perfectly obvious that increasing welfare rates can only help the economy. I dare you to stop using welfare recipients as economic scapegoats.” Did I miss something?
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The point is that the assumptions we make are important. I’ve argued all semester for seven ideas:
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This note was uploaded on 04/16/2009 for the course ECON 103 taught by Professor Hanafiahharvey during the Winter '08 term at Simon Fraser.

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lecture22 - Economics 103 Lecture # 22 Candide A last...

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