Tuesday, 26 August 2008

Cool essay

Russ Roberts tells us he has been trying to get Hayek's insights, particularly in "The Use of Knowledge in Society," his 1945 American Economic Review paper across to students. He asks how do you bring these insights into the classroom? How do you get students to understand what Hayek meant when he wrote about price adjustment:

Robert's answer is this essay, "How Markets Use Knowledge" (pdf). The essay tries to integrate supply and demand and Hayek's description of the price system as a "marvel". Ironically, it treats the price system as "perfect" but with luck Roberts has been able to capture in a traditional supply and demand framework, some of what Hayek was getting at.

Read and enjoy.

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