“WHAT DO ECONOMISTS ACTUALLY KNOW?” Professor Russ Roberts began his article entitled “What Do Economists Actually Know?” as follows: “A journalist once asked me how many jobs NAFTA had created or destroyed. I told him I had no reliable idea.” Roberts explains that empirical issues such as the effect of a trade treaty or a change in the minimum wage “have smart people on both sides of the issue each with their own sophisticated analysis to bolster their claim.”
Rpberts says: “The real problem is even if you could run the experiment of cutting taxes and seeing what happens, the reduction in tax rates isnâ€™t the only thing that is going to be going on. There are many other things happening at the same time.”
In other words, nature doesn’t run the right experiments.