Mainstream economics tries to solve ‘big’ questions, treating economics like physics and trying to find the one true model that applies in all places at all times.

Mainstream economics tries to solve ‘big’ questions,

1. [Reading] Read the following paper:

Li, P. S. (1987). The Economic Cost of Racism to Chinese-Canadians. Canadian Ethnic Studies, 19(3), 102 – 113. Retrieved from http://search.proquest.com/docview/1293156009

a. Write a 3-2-1 report on the paper above. Remember that you CAN’T just copy-and-paste text from the paper.  You need to either cite quotes properly, andexplain why you chose them, or use your own words. (12 marks)

b. The author of the article, Peter S. Li, is a sociologist, not an economist, and uses the phrase ‘economic cost’ differently than an economist would.  Use your economic training and what you have learned in the article to briefly describe what the economic cost of racism is to Chinese-Canadians. You mustrefer to evidence in the article in order to receive fullmarks.(3 marks)

Hint: Remember that economics studies the allocation of limited resources among unlimited needs and wants.  How does racism influence the allocation of resources by Chinese-Canadians? What cost does this changed allocation imposed, compared to a world with no racism?

Solow, R. (1985). Economic History and Economics, The American Economic Review,
75(2), 328-331. Retrieved from http://www.jstor.org/stable/1805620
3 Main Points:
• Mainstream economics tries to solve ‘big’ questions, treating economics like
physics and trying to find the one true model that applies in all places at all
times.
• Different social and institutional setups should require different economic
models. Economic historians are well-placed to analyze different social
arrangements, etc. in a way that allows this.
• Since economics doesn’t have the advantage of controlled conditions or
repeatable experiments, economists should be satisfied with models of
limited results and applicability. The economic historian can then check
whether the models apply in other times and places and investigate why or
why not.

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