Economics¶
Social science that studies - how people interact with __ for their livelihoods - each other - natural surroundings - how this changes over time
Mixture of Sociology and Political Sciences
Grounded on the principle that 'the market knows best'
Fields¶
| Field | Studies | Key Areas | Methodology | Tools |
|---|---|---|---|---|
| Micro | Individual units and how they interact with each other in a world with scarce resources | Producers Consumers Firms | ||
| Macro | Understand the economy as a whole Effects of large scale economic decisions on entire society Not just large-scale of microeconomics | Economy - Output level - Inflation - Unemployment - Exchange rate - Large-scale interactions - Equilibrium effects | ||
| Industrial | Market structures and firm interactions | Market power, competition, antitrust policy | Theoretical models, empirical analysis | Game theory, econometrics |
| Managerial | Business decision-making processes | Demand analysis, cost analysis, pricing | Application of economic principles | Statistical analysis, forecasting |
Model¶
Simplified representation of a system with assumptions
Economic models are not like scientific laws
Purpose¶
- simplify economic decisions
- how to change outcomes
- focus on what's important
- built with assumptions
- omits details
Characteristics of a good model¶
- Simple
- Easy to work with
- Insightful
- Generalizable
- Easy to test, and thereby accept/reject
- Empirically consistent
- Predictive precision
Movies¶
- The Big Short
- the good the bad the ugly
- coach carter movie
- the beautiful mind