SFB 303 Discussion Paper No. A - 171
Author: Hammond, Peter J.
Title: Theoretical Progress in Public Economics: A Provocative Assessment
Abstract: The following twelve controversial issues are each briefly discussed: the blindness of the invisible hand to
injustice; a misleading efficiency theorem; truthful revelation of feasibility constraints; delusions of first best;
deadweight losses as sunk costs; markets as failures; the nth best as enemy of the good; intermonetary
comparisons of gains and losses; no worthwhile change is small; surplus economics; surplus econometrics; and
unbalanced policies. Unbalanced policy changes should be evaluated by estimating the probabilities of different
joint frequency distributions of welfare relevant attributes and welfare net gains for all individuals in the
population, together with the budget deficits or surpluses.
Creation-Date: May 1988
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