|Peter Boettke|
Raj Chetty presented the Ely Lecture this year at the AEA meetings. Here is a video of his talk and Richard Thaler's introduction.
His argument that behavioral factors should be considered pragmatically rather than in some deep philosophical sense makes some sense. He is a brilliant analyst and speaks in a clear and confident manner.
But I would argue that his approach reflects a fundamental behavioral asymmetry and continues to insulate the political process of policy making from the same analytical scrutiny that he brings to his analysis of decision making among citizens. Policy advice continues to be presented as if it is being offered to a benevolent despot.
I wonder how much progress could be made in political economy if the best and the brightest among economists, such as Raj Chetty, would take seriously the admonition of Hayek, Buchanan, and Elinor Ostrom that the assumptions of omniscience and benovolence must be rejected if we are going to make progress and develop a robust theory of political economy.
We Virginia School of Political Economy economists have a lot of work still ahead to make the impact on our peers.
BTW, Mario Rizzo's "Austrian Economics Meets Behavioral Economics" is essential reading.
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