The argument that econometric policy evaluation is likely to be misleading if policymakers assume stable economic relationships is known as
A)the monetarist revolution.
B)the Lucas critique.
C)public choice theory.
D)new Keynesian theory.

Question

Quizplus · Accepted Answer

The argument that econometric policy evaluation is likely to be misleading if policymakers assume stable economic relationships is known as the Lucas critique. It emphasizes the need to account for the fact that the behavior of economic agents may change in response to policy changes, making it necessary to reevaluate existing models and analytical tools used to assess policy effectiveness. The other choices are not directly related to this issue.

The Argument That Econometric Policy Evaluation Is Likely to Be