Government representatives use the price theory analysis in decision making. They use expert economists to gauge future decisions. The role of economists in the government’s decision-making process is mainly giving advice. The final decision on price may be a result of the influence of political ideologies on price. Difficulties in collaboration between economists and politicians arise in part from the general public’s mistrust of experts in general, as well as of economic statistics. Misdirection of the public is one of the effects of politics on the economy. Members of the public usually side with the views of their political representatives rather than expert economists.
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POLICY FORMULATION IN THE GOVERNMENT
The role of economists in the government decision-making process may affect price theory analysis by the government. Such effects may include conflicts of interest that remain sometimes undeclared and the difficulty in agreeing on a position. During policy formulation, the influence of political ideologies on price usually affects the final decision. This research paper aims to discuss ways to reduce the effects of politics on the economy. The essay suggests the use of expert economist opinions. Additionally, economists should draft expert reports and take part in working groups that lay the groundwork for public decision-making. This simplifies price theory analysis in government decision making. Therefore, the government representatives through formulated policies plays a huge role.
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PRICE THEORY AND PLANNED ECONOMIES
In a planned economy, the factors of production are owned and managed by the government. Therefore, the government decides what to produce, how much to produce and for whom to produce. This forms a good example in the price theory analysis. In such economies, the effect of politics on the economy plays the biggest role. Decision-making is usually centralized and members of the public have limited power to influence this. The role of economists in government decision making is limited as well. This is because the government does not aim at making a profit. Such a system also gives less political powers to public representatives. The influence of political ideologies on price thus, becomes very difficult. Finally, Planned economies highly limit price theory analysis in government decision making.
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