Free Lunch Thinking: How Economists Ruin the Economy

Why most economic assumptions made by governments are wrong

Economic theories and models shape our everyday lives. They are relied on by politicians when tax rises or cuts are being considered. They inform debates about everything from bonuses for CEOs to minimum wage rates to the level of job protection enshrined in law. They determine what levels of tobacco or gas taxes are charged, and influence government approaches to issues as diverse as obesity and climate change.

The question is: ar...