Yes! Economics really does explain the world. Part of the problem with people undervaluing economics is complaining that economists are not able to predict things precisely. But this is not physics! Part of the economic explanation of the social world is that it’s complex and multiple things happen at once, so to hope for exact numerical predictions is a misunderstanding. But, at the same time, we can still predict a lot with basic economics. It’s one of the greatest teachers.
Excellent post. In "Simple economics is surprisingly good at making real-world predictions.", I would underscore "simple". The power of economics lies in the simple logic of supply and demand, and its focus on incentives.
I would disagree, however, on the suggestion that Nobel Prize economists can't be political hacks. Sometimes they are, and part of the reason for the harsh criticism leveled against economics is that some of us economists do in fact surrender our professional honesty to political agendas or the all-too-human thirst for clicks.
Bu thanks for an excellent post reminding everyone that basic, common-sense economics remains the best guide for important policy decisions.
It’s economics, stupid!
Yes! Economics really does explain the world. Part of the problem with people undervaluing economics is complaining that economists are not able to predict things precisely. But this is not physics! Part of the economic explanation of the social world is that it’s complex and multiple things happen at once, so to hope for exact numerical predictions is a misunderstanding. But, at the same time, we can still predict a lot with basic economics. It’s one of the greatest teachers.
Excellent post. In "Simple economics is surprisingly good at making real-world predictions.", I would underscore "simple". The power of economics lies in the simple logic of supply and demand, and its focus on incentives.
I would disagree, however, on the suggestion that Nobel Prize economists can't be political hacks. Sometimes they are, and part of the reason for the harsh criticism leveled against economics is that some of us economists do in fact surrender our professional honesty to political agendas or the all-too-human thirst for clicks.
Bu thanks for an excellent post reminding everyone that basic, common-sense economics remains the best guide for important policy decisions.