The uses of economic theory
Subtitle: against a purely positive interpretation of theoretical results
By: Abhijit Banerjee
Contributors: Massachusetts Institute of Technology. Dept. of Economics
Series: Working paper series / Massachusetts Institute of Technology, Dept. of Economics -- working paper 02-24; Working paper (Massachusetts Institute of Technology. Dept. of Economics) -- no. 02-24.
Publisher: Massachusetts Institute of Technology, Dept. of Economics
Published: 2002
Place of publication: Cambridge, MA
Language: eng
Number of pages: 27
Description: Economists are excessively influenced by the so-called positive economics view, which says that economists should only describe and not prescribe. Here I argue that this view is flawed because it makes unreasonably strong assumptions about what players (the agents taking economic decisions) know and understand. I then use the example of micro-credit to show how this bias towards positive economics has distorted the policy debate. Keywords: Positivist Methodology, Mechanism Design, Micro-credit. JEL Classifications: B4, D8, O2.
Notes: "May 30, 2002."

Includes bibliographical references (p. 23-27).

Abstract in HTML and working paper for download in PDF available via World Wide Web at the Social Science Research Network.