Economics, same with other sciences, has the essence : the scientific method (the dispassionate development & testing of theories about how the world works). Albert Einstein said, "The whole of sciences is nothing more than the refinement of everday thinking". The interplay between theory and observation also occurs in the field of economics.
Although economists use theory and observation like other scientist, they face an obstacle that makes their task especially challenging : In economics, conducting experiments is often difficult and sometimes impossible.
For instance, physicists studying gravity can drop many objects in their laboratories to generate data to test their theories. By contrast, economists studying inflation are not allowed to manipulate a nation's monetary policy simply to generate useful data. Economists, like astronomers and evolutionary biologist, usually have to make do with whatever data the world happens to give them. To find substitute for laboratory experiments, economists pay close attention to the natural experiments offered by history.
Ceteris paribus, to build an assumption that the economics model drawn is valid at same situation. According to my lecturer in microeconomics I, yes it's true that model is not reality, but that's useful.
Imagine, imagine, imagine..collecting valid data, process it by principles of economics, figured it by mathematical language..our fine arts are curves, graphics, and charts -- yah, we are economists wanna be!
I will be :)
-19.35, with Principles of Economics 5th ed, Mankiw-
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