Journal of Monetary Economics 2016 DOI: 10.1016/j.jmoneco.2015.10.006 View full text
Benjamin B. Lockwood, Matthew Weinzierl

Abstract: AbstractCalculating the welfare implications of changes to economic policy or shocks to the economy requires economists to decide on a normative criterion. One way to make that decision is to elicit the relevant moral criteria from real-world policy choices, converting a normative decision into a positive inference exercise as in, for example, the recent surge of so-called "inverse-optimum" research. We find that capitalizing on the potential of this approach is not as straightforward as we might hope. We per…

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