Even Nobel economists make ignoble mistakes

I try to teach people to make fewer mistakes,” said the newly-minted economics Nobel laureate, Richard Thaler, in an interview earlier this week. “We need to take full account of the fact that people are busy, they’re absent-minded, they’re lazy.”

Congratulations to Professor Thaler; I think his brilliantly accessible work is part of a growing and important contribution of behavioural perspectives that enrich traditionally strictly “rationalist” economics. I just wish the laureate had avoided making some big mistakes of his own, where he failed to apply his theories to himself. After the November 8 demonetisation in India, he had tweeted, “This is a policy I have long supported. First step toward cashless and good start on reducing corruption.”

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