The importance of behavioural economics

David Brooks is the finest American political commentator. But he dedicates one of his two columns a week to brain science. Brain science is, even to someone like me who gladly gave up science at 16, absolutely fascinating. It also has a real relevance to charting a way out of this current crisis.

Brooks’ column today is a look back at why the economy might not recover because of social factors. His focus is on the US, but his insights apply equally well to this country. Here’s the key section of it:

“During 2010, the economic decline abated, but the recovery did not arrive. There were a few false dawns, and stagnation. The problem was this: The policy makers knew how to pull economic levers, but they did not know how to use those levers to affect social psychology.

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