“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 isn’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.