Tag Archives: economists

01.01.2013 | A New Year’s Resolution

If one of your New Year’s resolutions is to “think economically,” please remember this top ten list:

Whatever the question, always answer, “There’s no such thing as a free lunch.”
Defend a decision by declaring, “It was worth the opportunity cost.”
Whether you like or dislike government, point to, “The power of the market.”
Explain a love of low prices with, “It’s the law of demand.”
Explain high prices with, “It’s the law of supply.”
Preface a position with, “on the one hand…but on the other…”
Justify your Thai T-shirt, Japanese camera, and Sumatran coffee beans by repeating, “comparative advantage, comparative advantage…”
When asked, “How are we doing?” just cite the GDP, CPI, and S&P.
Know that the size of the pie has nothing to do with food.
And finally, the most dependable way to “think economically” is to remember that, no matter what the topic, “It’s about the economy…”

Note: I wrote this list several years ago and repost it on New Year’s. Enjoy and happy new year!

Posted by: adminEcon
Tags: 2013, economic humor, economists, New Year's resolutions, thinking economically, top ten lists
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10.05.2012 | Blame, Bias and Belief

Having just begun The Sense of an Ending by Julian Barnes, I wanted to share a wonderful excerpt. While this student is commenting on the origins of the First World War, his comments take us far beyond.

“Indeed, isn’t the whole business of ascribing responsibility a kind of cop-out? We want to blame an individual so that everyone else is exculpated. Or we blame a historical process as a way of exonerating individuals. Or it’s all anarchic chaos, with the same consequence. It seems to me that there is–was–a chain of individual responsibilities, all of which were necessary, but not so long a chain that everybody can simply blame everyone else. But of course, my desire to ascribe responsibility might be more a reflection of my own cast of mind than a fair analysis of what happened. That’s one of the central problems of history, isn’t it, sir? The question of subjective versus objective interpretation, the fact that we need to know the history of the historian in order to understand the version that is being put in front of us.”

Can’t we substitute economist for historian in the excerpt? And might this student’s comments about “ascribing responsibility” refer also to our recent financial crisis?

Sources and Resources: The excerpt is from p. 13 in the paperback edition of The Sense of an Ending, winner of the 2011 Man Booker Prize. You might also enjoy this econtalk podcast on “Truth, Science and Academic Incentives” and this one on “Science, Replication and Journalism.” Both podcasts take you to academic bias and relate to Daniel Kahneman’s discussion of confirmation bias in Thinking Fast and Slow, p. 80-81.

Posted by: adminEcon
Tags: belief, causation, confirmation bias, Daniel Kahneman, economists, financial crisis, First World War, great recession, historians, Julian Barnes, The Sense of an Ending
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09.07.2011 | Economic Humor

For laughter and economic insight, the following are wonderful.

A Cartoon: From gocomics.com, a very hypothetical illustration of “The First Economist.”

A Daily Show Excerpt: Treasury Secretary Tim Geithner’s problems with selling his house.

The Economic Lesson

Some serious reading that relates to this economic humor might include Paul Krugman’s excellent NY Times Magazine article about saltwater and freshwater economists. As the cartoon says, “Um…It didn’t work…again…But the theory is still sound.”

And, for more background about the housing crisis, here, through their purchase of “toxie,” NPR’s Planet Money reporters tell the whole story.

An Economic Question: How would you interpret “the first economist” cartoon?

Posted by: adminEcon
Tags: economic humor, economists, housing crisis, Paul Krugman, Timothy Geithner
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06.10.2010 | Starbucks or McDonald’s?

A recent Pew Research Center survey asked 2260 adults whether they would, “prefer to live in a place with more McDonald’s or more Starbucks.” 43% said McDonald’s; 35% said Starbucks; 22% had no preference. According to the study, a key variable is your political inclination. Liberals tend to favor Starbucks over McDonald’s.

More specifically, if you are female, politically liberal, 18-29 years old, earn more than $75,000 a year, a college graduate, or religiously unaffiliated, you probably prefer Starbucks. On the other hand, a McDonald’s loyalist tends to be male, to earn less than $30,000, to have a high school degree but not college, and/or to be Protestant or Catholic.

The Pew survey reminded me of research about economics majors that was in the news. Discussing the connection between education and civic behavior, a New York Fed Staff Report concluded that students who majored in economics tended to be Republicans. Taking a huge analytic leap, does that means that economists prefer McDonald’s?

The Economic Lesson

McDonald’s and Starbucks compete in monopolistically competitive markets. The characteristics of monopolistic competition include many sellers with a similar product, sellers creating an individual, unique identity, and sellers having some control over price. The competitive behavior of beauty salons, supermarkets, and clothing manufacturers is also shaped by a monopolistically competitive market structure.

From most competitive to least competitive, the four basic competitive market structures are: perfect competition, monopolistic competition, oligopoly, monopoly.

Posted by: adminEcon
Tags: competitive market structure, economists, McDonald's, monopolistic competition, Starbucks
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