What Are Theorems? What Are Precepts? If Two Economists Agree

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The Answer is Theorems are propositions that are logically True based on the assumptions of a model. A precept is policy rule in favor of a particular course of action. With a theorem, an economist can explain how the world may work. With a precept, an economist turns that explanation into a recommendation for action. Because precepts are based on theorems combined with empirical evidence and the goals of society, two economists who agree on a theorem may not necessarily agree on the precept; they might disagree on whether the assumptions of the model hold (which could be tested empirically), or they might disagree on what the goals of society should be. Two economists might also arrive at the same precepts, but based on altogether different theorems, empirical evidence and goals.

What Are Theorems? What Are Precepts? If Two Economists Agree

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