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Op-Ed

Even Nobel economists make ignoble mistakes

Content from the Brookings Institution India Center is now archived. After seven years of an impactful partnership, as of September 11, 2020, Brookings India is now the Centre for Social and Economic Progress, an independent public policy institution based in India.

Editor's Note:

This article first appeared in The Indian Express. The views are of the author(s).

I try to teach people to make fewer mistakes,” said the newly-minted economics Nobel laureate, Richard Thaler, in an interview earlier this week. “We need to take full account of the fact that people are busy, they’re absent-minded, they’re lazy.”

Congratulations to Professor Thaler; I think his brilliantly accessible work is part of a growing and important contribution of behavioural perspectives that enrich traditionally strictly “rationalist” economics. I just wish the laureate had avoided making some big mistakes of his own, where he failed to apply his theories to himself. After the November 8 demonetisation in India, he had tweeted, “This is a policy I have long supported. First step toward cashless and good start on reducing corruption.”

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