If every effect of any new products or methods were required to be known before they could be produced and marketed, they would not be true innovations - and thus not represent new knowledge of what people would like, if offered.
Edmund PhelpsRead
At the simplest level, economics can better show us the consequences of our actions. Less simple are cases in which we don't have the knowledge to predict the full consequences. Global warming and climate change are examples.
Interpretation
What this quote means
Economics helps us understand the outcomes of our actions, although predicting complex issues like climate change remains challenging.
In this quote, Edmund Phelps emphasizes the role of economics in revealing the effects of human actions. While economics can often provide insights into straightforward scenarios, the complexities surrounding issues like global warming highlight the limits of our knowledge and the difficulty in accurately forecasting the broad impacts of our decisions.
Themes
EconomicsConsequencesClimate ChangeGlobal WarmingKnowledge
In practice
Example use cases
This quote can be used in a lecture about the importance of economics in environmental policy.
More from Edmund Phelps
All quotes βThe good life, as it is popularly conceived, typically involves acquiring mastery in one's work, thus gaining for oneself better terms - or means to rewards, whether material, like wealth, or nonmaterial - an experience we may call 'prospering.'
Edmund PhelpsRead
The epic story of the West is the development in the 19th century of a mass prosperity the world had never seen and its near-disappearance in one nation after another in the 20th.
Edmund PhelpsRead
Entrepreneurs have only the murkiest picture of the future in which they are making their bets, and also there is ambiguity: they don't know when they push this lever or that lever that the outcome is going to be what they think it is going to be - there is the law of unanticipated consequences.
Edmund PhelpsRead
When the word 'morality' comes up in connection with economics, income distribution and financial stability are usually the issues. Is it moral for rich countries to use such a high proportion of the world's resources or for investment bankers to earn large bonuses?
Edmund PhelpsRead
A nation's economy is more than its markets, tastes, technologies and property rights.
Edmund PhelpsRead
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