Political Economy in Economic Policy Advice

Abstract

To commence with my part in the proceedings, I will attempt to find some conciliatory ground between the opinions expressed by Gebhard Kirchgässner and Wolfgang Franz with regard to the competency of economists in economic policy advisory activities. Whereas Gebhard Kirchgässner, with considerable justification, points at the questionable theoretical approaches used by standard economics and their similarly questionable underpinnings in scientific theory, I still feel that Wolfgang Franz is similarly justified in emphasising that we do have economic insights which are — to a greater or lesser extent — shared by a majority of economists. By themselves, both comments say little on the political relevance of such insights, and this is the subject I want to discuss.