Folk Economics

24 Pages Posted: 19 Sep 2002  

Paul H. Rubin

Emory University - Department of Economics

Abstract

Folk economics is the intuitive economics of untrained persons. It is concerned with distribution, and does not allow for or understand incentives. Folk economic notions evolved in our ancestors in circumstances where there was little in the way of specialization, division of labor, capital investment, or economic growth. It can explain the beliefs of naive individuals regarding matters such as international trade, labor economics, law and economics, and industrial organization. It is important that voters understand economic principles. Economists would do a better job of persuading others and of teaching if we paid explicit attention to folk economics. Because untrained individuals do not fully understand gains from trade, training in economics is likely to improve welfare by increasing the number of trading opportunities. There is evidence that this is in fact true.

JEL Classification: A0, H0, K0

Suggested Citation

Rubin, Paul H., Folk Economics. Available at SSRN: https://ssrn.com/abstract=320940 or http://dx.doi.org/10.2139/ssrn.320940

Paul H. Rubin (Contact Author)

Emory University - Department of Economics ( email )

1602 Fishburne Drive
Atlanta, GA 30322
United States
404-931-0493 (Phone)
630-604-9609 (Fax)

HOME PAGE: http://www.economics.emory.edu/Rubi.htm

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