Question

8. Agreement and disagreement among economists

Suppose that Edison, an economist from a research institute in Texas, and Hilary, an economist from a nonprofit organization on the West Coast, are arguing over budget deficits. The following dialogue shows an excerpt from their debate:

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Hilary: Most people recognize that the budget deficit has been rising considerably over the last century. We need to find the best course of action to remedy this situation.

Edison: I believe that a cut in income tax rates would boost economic growth and raise tax revenue enough to reduce budget deficits.

Hilary: I actually feel that raising the top income tax rate would reduce the budget deficit more effectively.

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1/The disagreement between these economists is most likely due to............................

a.differences in scientific judgments.

b.differences between perception versus reality.

c.differences in values

2/Despite their differences, with which proposition are two economists chosen at random most likely to agree? ( multiple choice)

a. Immigrants receive more in government benefits than they contribute in taxes.

b. Rent ceilings reduce the quantity and quality of available housing.

c. Having a single income tax rate would improve economic performance.

Answer 1

1.a.differences in scientific judgments.

There are two main reasons that economists tend to disagree: differences in values and differences in scientific judgments. In this case, the economists disagree due to differences in scientific judgments because they disagreeabout a factual matter: the type of policy needed to keep the economy functioning smoothly while combating budget deficit. In contrast, disagreement due to differences in values reflect differing assessments on fairness or equity.

2.b. Rent ceilings reduce the quantity and quality of available housing.

While many economic questions are open to debate, the field is largely in agreement on some points. For example, two economists chosen at random are most likely to agree that rent ceilings reduce the quantity and quality of available housing. Indeed, one survey that 93% of economists agree with this proposition. It would be harder to find two randomly chosen economists who both agree with either of the other propositions.