8 Agreement and disagreement among economists Suppose that C

8. Agreement and disagreement among economists Suppose that Clancy, an economist from a business school in Georgia, and Eileen, an economist from a university in Massachusetts, are arguing over government bailouts. The following dialogue shows an excerpt from their debate Eileen: Thanks to recent financial crises, the concept of bailouts is a hot topic for debate among everyone these days. Clancy: Indeed, it\'s gotten crazy! A government bailout of severely distressed financial firms is unnecessary because free markets will properly price assets. Eileen: I don\'t know about that. Without a bailout of severely distressed financial firms, the economy will experience a deep recession The disagreement between these economists is most likely due to Despite their differences, with which proposition are two economists chosen at random most likely to agree? Minimum wage laws do more to harm low-skilled workers than help them. Tariffs and import quotas generally reduce economic welfare Lawyers make up an excessive percentage of elected officials

Solution

The difference between economists is most likely due to difference in scientific judgement. Clancy represents the classical school of judgement and Eileen represents the Keynesian school..

There is a popular joke that two economists may agree on many things but they seldom agree on economic thoughts. So despite the differences two economists chosen at random are most likely to agree that lawyers make up an excessive percentage of elected officials.