National Affairs
Summer 2010
To understand the challenge government economists have faced over the past year and a half, it is useful to imagine the case of a physician trying to treat an ill patient. The patient presents herself in terrible shape; the physician has never treated a condition with symptoms quite like hers before; and the causes of the ailments are unclear. The doctor remembers reading about a similar case in medical school — and, trying to recall as much of his training as possible, he endeavors to come up with a theory as to why the patient is sick and to determine what will make her better.
In an ideal world, the doctor would run a controlled experiment: He would assemble 100 patients with similar symptoms, give 50 of them the medicine that seems most likely to work and the other 50 a placebo, and then see whether the patients on the medicine in fact improved. But the doctor does not have 100 patients — he has only one. So, based on his assessment of what is causing the patient's troubles, and the most likely remedy, he takes a risk and administers the medicine.
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1 comment:
Spyridon D.Tsamaidis wrote,
- Not being an Economist, my views are folllowing a rather different track, and focused on our (Greek) problem.
- It seems that none actually evaluates and assess economic conditions that existed before a crisis surfaced.
- That is, most solutions to exit a crisis - economic or not - is a higher tide of new rules, new laws, new regulations, new restrictions etc on top of the old ones......
- Low tide (crisis) makes all wrecks visible..,
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