In “Good economics for hard times” Abhijit Banerjee and Esther Duflo try to approach some of the most pressing problems of economics providing different possible scenarios and solutions for issues such as immigration, income inequality, climate change, slow economic growth, globalization and technological unemployment.
“Good economics starts with troubling facts, makes some guesses based on what we already know about human behaviour and theories elsewhere shown to work, uses data to test those guesses, refines (or radically alters) its line of attack based on the new set of facts, and eventually, with some luck, gets to a solution.”
“The fear of failure is a substantial disincentive for embarking on a risky adventure. Many people prefer not to try. After all, most of us want to protect an image of ourselves as intelligent, hard-working, morally upright individuals, both because it is simply not pleasant to admit we might in fact be dumb, lazy, and unscrupulous, but also because maintaining a good opinion of ourselves preserves our motivation to keep trying in the face of whatever life throws at us.”
“The fact that each individual decision is rational does not make the outcome desirable. Herd behaviour generates informational cascades: the information on which the first people base their decision will have an outsized influence on what all the others believe.”
“The government exists in part to solve problems no other institution can realistically tackle. To demonstrate waste in government, one needs to show there is an alternative way of organizing the same activity that works better.”
“Economics is too important to be left to economists.”
Book Authors: Abhijit Banerjee and Esther Duflo