Clear thinking is a prerequisite for good economics. This leads to improved decision making, and that creates better outcomes.
The next time someone claims to be making an economic decision or proposes an economic course of action; dissect their claim or assertion. You do not need to be an economist to do that. There are five simple signs for good economic decision making:
- Decision to be made is articulated
- Available choices are considered
- Measurable objectives are described
- Input variables are identified
- Relationship between variables is determined
Without these famous five, the risk is the economic decision may be dead on arrival.
