Wissink Economics 301- Intro

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WissinkEconomics 301- Intro
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About Economics This Course

• So what is this course about?
• (And what is it not about?)
• My working titleAdvanced Introduction
  toApplied MicroeconomicTheory

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About Economics This Course

• Theory We will construct models.
• Look at the world and decide what it is we want
  to explain or predict
• identify important variables
• state assumptions that govern the model
• make hypotheses
• analyze the model
• use the model to make predictions
• and then see if the model holds up under
  empirical scrutiny.

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About Economics This Course

• Economic(s) The study of the allocation of
  scarce resources to produce commodities to
  satisfy infinite human wants.
• Classic definition.

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About Economics This Course

• MACRO VS. MICRO
• Micro Looks at small pieces of the puzzle,
  individual markets
• Three basic micro questions
• What?
• How?
• For Whom?
• How will be decide?
• How will we like the final allocation?

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About Economics This Course

• Macro the study of the determination of
  economic aggregates and how they relate to each
  other and how the government and the exogenous
  environment affects these aggregates
• Macro examines the factors that determine
• total national output, or total national product
• total national income
• price levels
• unemployment
• interest rate levels
• the business cycle

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About Economics This Course

• Applied Where and when we can, we will apply
  what we are learning to the real world economy.
• Introduction Getting you started, getting you
  familiar, getting you acquainted.
• Advanced Will use math without apology.

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Why Study Economics?

• Economics is everywhere.
• Its requirement!? Prerequisite!?
• To help you understand how economists think and
  construct arguments.
• To understand how markets and the economy work.
• To create a foundation to help you differentiate
  good from bad analysis and policy prescriptions.
• To get a better understanding of the economics
  problems faced by modern societies domestic and
  globally.
• To better understand the government's and an
  economys ability to promote growth, maintain
  high levels of economic activity, maintain high
  levels of employment, maintain stable prices, and
  promote improved quality of life.

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On Modeling Constructing Theories

• Simplistic Model Construction
• Ockhams Razor
• Evaluation of Models
• economics is a social science
• Two pitfalls to avoid
• the fallacy of composition
• post hoc ergo propter hoc mistakes
• Positive vs. Normative analysis
• is
• ought to be