28-Paul_Ormerod_Tutor2u_BL

28-Paul_Ormerod_Tutor2u_BL - The future of economics...

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The future of economics – lessons from the Nobel Laureates… and beyond Paul Ormerod June 2011 www.paulormerod.com
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What is economics? PJ O’Rourke Eat The Rich : “One thing that economists do know is that the study of economics is divided into two fields, “microeconomics” and “macroeconomics”. Micro is the study of individual behaviour, and macro is the study of how economies behave as a whole.” “That is, microeconomics concerns things that economists are specifically wrong about, while macroeconomics concerns things economists are wrong about generally”
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Public perceptions of economists Public image is almost entirely about macro-economics Economists in the media talk about future prospects for the economy They try to explain what has just happened e.g. in financial markets They set interest rates at the Bank of England All these are ‘big’ things
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Macro economics: the Queen’s question PJ O’Rourke has more or less got it right Even one year ahead, forecasts for the economy have a very bad track record e.g. output growth, changes in inflation No agreement amongst economists about what happens if, say, interest rates are increased No sign of forecasts getting better, or of agreement increasing Conventional macro theory was completely ignored by policymakers in the financial crisis – lessons from 1930s used instead
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This note was uploaded on 02/08/2012 for the course ECO 51844 taught by Professor Sabet during the Spring '11 term at FIU.

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28-Paul_Ormerod_Tutor2u_BL - The future of economics...

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