www.TopSage.comUniversityofCaliforniaatBerkeleygraduationspeech∗ThomasJ.SargentMay16,2007IrememberhowhappyIfeltwhenIgraduatedfromBerkeleymanyyearsago.ButIthoughtthegraduationspeecheswerelong.Iwilleconomizeonwords.Economicsisorganizedcommonsense.Hereisashortlistofvaluablelessonsthatourbeautifulsubjectteaches.1.Manythingsthataredesirablearenotfeasible.2.Individualsandcommunitiesfacetrade-offs.3.Otherpeoplehavemoreinformationabouttheirabilities,theirefforts,andtheirpreferencesthanyoudo.4.Everyonerespondstoincentives,includingpeopleyouwanttohelp.Thatiswhysocialsafetynetsdon’talwaysendupworkingasintended.5.Therearetradeoffsbetweenequalityandefficiency.6.Inanequilibriumofagameoraneconomy,peoplearesatisfiedwiththeirchoices.Thatiswhyitisdifficultforwellmeaning大家论坛——全球最大的教育培训学习考试论坛！英语、财会、计算机网上学习家园！http://club.topsage.com/forum-439-1.htmlwww.TopSage.comoutsiderstochangethingsforbetterorworse.7.Inthefuture,youtoowillrespondtoincentives.Thatiswhytherearesomepromisesthatyou’dliketomakebutcan’t.Noonewillbelievethosepromisesbecausetheyknowthatlateritwillnotbeinyourinteresttodeliver.Thelessonhereisthis:beforeyoumakeapromise,thinkaboutwhetheryouwillwanttokeepitifandwhenyourcircumstanceschange.Thisishowyouearnareputation.8.Governmentsandvotersrespondtoincentivestoo.Thatiswhygovernmentssometimesdefaultonloansandotherpromisesthattheyhavemade.大家论坛——全球最大的教育培训学习考试论坛！英语、财会、计算机网上学习家园！http://club.topsage.com/forum-439-1.htmlwww.TopSage.com9.Itisfeasibleforonegenerationtoshiftcoststosubsequentones.ThatiswhatnationalgovernmentdebtsandtheU.S.socialsecuritysystemdo(butnotthesocialsecuritysystemofSingapore).1.Whenagovernmentspends,itscitizenseventuallypay,eithertodayortomorrow,eitherthroughexplicittaxesorimplicitoneslikeinflation.2.Mostpeoplewantotherpeopletopayforpublicgoodsandgovernmenttransfers(especiallytransferstothemselves).3.Becausemarketpricesaggregatetraders’information,itisdifficulttoforecaststockpricesa