What is “the economy?”
At first, this might seem like an esoteric question, but it has ramifications for how we approach public policy questions. This question has special relevance for those of us who conduct cost-benefit analysis, which has been called the “gold standard in applied welfare economics.”
At times, I have referred to cost-benefit analysis as a tool to study how the state can grow or shrink the economy. This has often led to protests from even experienced policy analysts, saying that cost-benefit analysis transcends economics by studying impacts like non-market goods such as those with existence value and those generated via externality.
Superficially, these protests are either semantic arguments or misunderstandings of what the undertaking of economics is all about.
Read more on the Scioto Analysis website.