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AbstractThis article illustrates numerically that the adjustment path of the economy will not show how a national policymaker may be misled by overaggregation until it is too late for correction. Labor and other resources are overaggregated in the equilibrating mechanism of most economic models, tending to mislead policymakers regarding both the amount and direction of change of important variables. Overaggregation also hides important constraints and tradeoffs which masks opportunities to use slack resources. In turn, this creates unnecessary dilemmas, such as that between inflation and unemployment which plagued the progress of the Humphrey‐Hawkins Bill. The article first illustrates the hypothesis using simple models. Then its relevance to current analysis and planning is discussed.

Economists & political scientists liberally criticize each other's approach to human behavior, even the Public Choice model that has been integrated into economic analysis. Gebhard Kirchgassner's 2000 evaluation of the economic model of human behavior & its four basic assumptions on methodological individualism, rational individual behavior, the existence of relevant alternatives, & selfishness as a main motivator are reviewed. Kirchgassner critiqued the limits of the economic approach & other political scientists, such as Persson & Tabellini (2003, 2004) have mounted similar attacks. However, the attacks on homo economicus are becoming less fruitful, so more dialogue between economists & political scientists would be useful. The articles in this special issue, summarized here, bridge the gap between the two research disciplines. They cover fiscal policy, the public sector & deregulation, European integration, & how to reinforce the bridge between the disciplines. References. M. Pflum

We develop an economic model of terrorism. Groups undertake violent activities to change the status quo when they are unable to bring about drastic political change in the face of limited access to economic opportunity. Furthermore, these groups are more likely to resort to terrorist activity when they face powerful policy-making elites who can't be uprooted easily, by legitimate means or otherwise. If, on the other hand, the elite groups currently in power are weak but can't be removed from power legitimately, the dissident groups are likely to initiate rebellion activity, such as civil wars & coups, to take over the rule of the governing elite themselves. In particular, the model exhibits multiple equilibria. For example, one equilibrium can be sustained where groups with limited access to opportunity may find it rational to engage in terrorist activities while policy-maker elites may find it rational not to engage in opening access to these groups. The result is, then, a pattern of reduced economic activity & increased terrorism. An alternative equilibrium can be sustained where access is more abundant & terrorism is reduced. 3 Figures, 19 References. Adapted from the source document.

Abstract:
The extractive, particularly mining has become
in recent years one of the most important economic
activities for the accumulation of capital,
as well as one of the most controversial activities
confluence of various actors (government,
private sector [mainly of a transnational], and
communities or inhabitants of the territories)
in a permanent struggle mediated by the strong
correlation that expresses the full enjoyment of
life and social classes, is to say, those who have
dominion and control of the means of production
and those without.
Resumen:
El extractivismo, y particularmente la actividad
minera se ha convertido en los últimos años en
una de las actividades económicas más relevantes
para la acumulación de capital, así como una
de las actividades más polémicas donde confluyen
diversos actores (Estado, sector privado
[principalmente de carácter transnacional],y las
comunidades o habitantes de los territorios) en
una lucha permanente mediados por la correlación
de fuerza que expresa la existencia y plena
vigencia de las clases sociales, es decir, de los
que tienen el dominio y control de los medios
de producción y los que no.

Abridged conference paper. Success in adapting the GDR's system to changing technologies and international circumstances; view of Soviet economic reform proposals.

People often wonder why economists analyse models whose assumptions are known to be false, while economists feel that they learn a lot from such exercises. We suggest that part of the knowledge generated by academic economists is case-based rather than rule-based. That is, instead of offering general rules or theories that should be contrasted with data, economists often analyse modelsthat are 'theoretical cases′, which help understand economic problems by drawinganalogies between the model and the problem. Thus, economic models, empiricaldata, experimental results and other sources of knowledge are all on equal footing, that is, they all provide cases to which a given problem can be compared. We offer complexity arguments that explain why case-based reasoning may sometimes be the method of choice and why economists prefer simple cases.