The study of economics

Joke I heard over the weekend regarding the discipline of economics.

A man walked out a bar and spotted another man, on his knees, by the side of the road. The first guy asked him,

"what are you doing?"

"I've lost my keys, I dropped them just now."

"Well, let me help you... Where did you last see them?"

"Over there, further down the road."
The first man was puzzled, "then why don't you look for them there??"

Second guy goes, "Well, the light's much better here, I can see much better."

Economics looks at the things they we already know, and then try to understand why it's like that. Why savings lead to a higher growth rate in the solow model, why the firm will empoly only certain amount of labour to be profitable. They all all useful and great, but what is it for?

Plenty of economic studies are done with assumptions and conditions that we already know, and we stay there, trying to solve our problems in the same spot. Static, steady states trying to prove general equilibrium. Though analytical sound and empirically rigorous, we often overlook the real driver behind growth and development; the technology and innovation, that economic theory just fails to provide a satisfactory answer to some of the breakthrough that really changes things. On our graphs, it's just a means to a new equilibrium, another business cycle.

Oh, and since I'm on the topic.... Check this out.



tell me what you think!