Dan Št’astný: The Economics of Economics

Abstract

The Economics of Economics (2010) by Dan Št’astný extends the economic approach of public choice and law and economics to see how economists behave so as to improve their well being in the world of uncertainty, scarcity and institutions. According to Št’astný, economists have been adjusting their behavior to the changing institutional environment and, consequently, ended up policy irrelevant. The book review provides an assessment of the model Št’astný employs. On the one hand, Št’astný offers a looking glass that helps seeing the decision making process of an economist from a price theory perspective. I suggest, on the other hand, that the model would be more accurate had it not considered preferences constant. In fact, the evolution of economists’ preferences and the changing sense of praiseworthiness is what the model should try to explain.

Keywords: Economics of economics, Public choice, Law and economics, Consensus, Theory-policy gap, Praiseworthiness

JEL Classification: A11, Z00