Economic theoristing and policy making

Abstract

This paper relates economic theorising and policy making in a context of people's changing behaviour, which makes economy to work in a different way. As economic theory is not adapting to these changes, it produces false predictions. Also institutional factors and their changes are not usually taken into account. Disagreements among economists play a vital role to this. They mainly arise from the existence of value judgements. Although usually exaggerated, disagreements can be minimised if value judgements are formed by using the whole set of the available information about the function and needs of the society. And this can be done only if economists can have a global view of the other social disciplines. *