6 ms·

I don't really care if people understand "real econ" (whatever that means) but most people haven't even progressed past a folk understanding of economics. Havin

I don't really care if people understand "real econ" (whatever that means) but most people haven't even progressed past a folk understanding of economics. Having at least a cursory understanding of why, e.g., price controls lead to scarcity is really a requirement to create an informed criticism of any part of Econ 101. To get to that point, reading through an intro level textbook is exactly what is needed.

TheOtherHobbes 9y ago
Of course absence of price control mechanisms can also lead to scarcity through bubble mechanisms - which can be tamed through taxes. Ask anyone trying to buy a house in Vancouver. Does Mankiw mention this in his "requirement for informed criticism"?
- stupidhn 9y ago
  >Does Mankiw mention this in his "requirement for informed criticism"? Are you honestly asking whether Mankiw discusses supply/demand price effects in his textbook?
- kevinnk 9y ago
  Prices are high because demand is high and supply is low. Yes, that gets covered.
stupidhn 9y ago
>but most people haven't even progressed past a folk understanding of economics There are a few subjects where the average HN denizen thinks they know more than the professionals by having read a mainstream book or two. Economics is one. You can identify these people when they ask, 'How come economists couldn't predict the crisis?'
frgtpsswrdlame 9y ago
I just don't buy that. Despite being less popular in academia there is absolutely an abundance of politically motivated libertarian/austrian/chicago school blogs, videos and books out there. Many intelligent young people fall down this rabbit hole early and never try to get out. Econ 101 books are only going to solidify their belief that they know economics. Something that challenges the simplified view of economics, that asks when the assumptions of some of these models ever actually apply, about what happens when you start dropping assumptions, about frictions and so on is what's needed. I looked around a bit to find the best article I could from my perspective, maybe you could read it and tell me what you think? https://www.bloomberg.com/view/articles/2015-11-24/most-of-what-you-learned-in-econ-101-is-wrong https://www.bloomberg.com/view/articles/2015-11-24/most-of-w...
- kevinnk 9y ago
  Any libertarian who takes Econ 101 will find their beliefs challenged tremendously, and not just by the "simple models" you're talking about. To be perfectly blunt, it sounds like you're trying to criticize something that you have an preconceived notion of, but no direct experience with, which is exactly why I was recommending you read Mankiw in the first place. I think you'll be surprised with the amount of time he spends on things like case studies of market failures or why the federal reserve system is a good idea. As to your link, Noah (whom I respect tremendously) does make a good point, but I think he overstates his case; true, simple supply-demand models don't work in every case (and the minimum wage is a good example of that, although I would counter that most of the non econ101 parts are somewhat short term and restricted to small increases) but for the vast, vast majority of cases people encounter in real life they work surprisingly well. Additionally, supply and demand is only a part of econ 101: Why can't I get tickets to Hamilton without paying a lot? Why do some restaurants charge more for dinner? If we put a tariff on Mexico, who pays? What are the pros and cons of free trade? What does deadweight loss mean? What does the federal reserve do and how does it affect me? What's the relationship between the money supply and inflation? What are the arguments for targeting non zero inflation? Why did we leave the gold standard? Is government debt bad? How is GDP measured? Why does the exchange rate change? Why doesn't the employment rate go to zero? What does the employment rate even mean? How do taxes affect the economy? Do different taxes have different effects? What are the arguments for and against using tax policy to encourage saving? What options does the government have to fight a recession? My city wants to reduce driving downtown, what are some possible policies? What economic policies can we use to fight global warming? What are the arguments for and against rent control? What is a monopoly? All of these questions are easily answered with macroecon 101 level knowledge and most are hard to answer without (we haven't even started talking about micro!) That doesn't mean econ 101 is always applicable, but it does mean you'll have a far better understanding of the world after taking it, even if you do come in with some preconceived notions. I will say that Noah's suggestion that econ 101 should be more emperical is a good idea, and I especially believe that there should be a stronger emphasis on stats. I actually think that's true of all the social sciences though, and its a separate issue from what you're talking about.
  - 9y ago

TheOtherHobbes 9y ago

Of course absence of price control mechanisms can also lead to scarcity through bubble mechanisms - which can be tamed through taxes. Ask anyone trying to buy a house in Vancouver. Does Mankiw mention this in his "requirement for informed criticism"?

stupidhn 9y ago
>Does Mankiw mention this in his "requirement for informed criticism"? Are you honestly asking whether Mankiw discusses supply/demand price effects in his textbook?
kevinnk 9y ago
Prices are high because demand is high and supply is low. Yes, that gets covered.

stupidhn 9y ago

>but most people haven't even progressed past a folk understanding of economics There are a few subjects where the average HN denizen thinks they know more than the professionals by having read a mainstream book or two. Economics is one. You can identify these people when they ask, 'How come economists couldn't predict the crisis?'

frgtpsswrdlame 9y ago

I just don't buy that. Despite being less popular in academia there is absolutely an abundance of politically motivated libertarian/austrian/chicago school blogs, videos and books out there. Many intelligent young people fall down this rabbit hole early and never try to get out. Econ 101 books are only going to solidify their belief that they know economics. Something that challenges the simplified view of economics, that asks when the assumptions of some of these models ever actually apply, about what happens when you start dropping assumptions, about frictions and so on is what's needed. I looked around a bit to find the best article I could from my perspective, maybe you could read it and tell me what you think? https://www.bloomberg.com/view/articles/2015-11-24/most-of-what-you-learned-in-econ-101-is-wrong https://www.bloomberg.com/view/articles/2015-11-24/most-of-w...

kevinnk 9y ago
Any libertarian who takes Econ 101 will find their beliefs challenged tremendously, and not just by the "simple models" you're talking about. To be perfectly blunt, it sounds like you're trying to criticize something that you have an preconceived notion of, but no direct experience with, which is exactly why I was recommending you read Mankiw in the first place. I think you'll be surprised with the amount of time he spends on things like case studies of market failures or why the federal reserve system is a good idea. As to your link, Noah (whom I respect tremendously) does make a good point, but I think he overstates his case; true, simple supply-demand models don't work in every case (and the minimum wage is a good example of that, although I would counter that most of the non econ101 parts are somewhat short term and restricted to small increases) but for the vast, vast majority of cases people encounter in real life they work surprisingly well. Additionally, supply and demand is only a part of econ 101: Why can't I get tickets to Hamilton without paying a lot? Why do some restaurants charge more for dinner? If we put a tariff on Mexico, who pays? What are the pros and cons of free trade? What does deadweight loss mean? What does the federal reserve do and how does it affect me? What's the relationship between the money supply and inflation? What are the arguments for targeting non zero inflation? Why did we leave the gold standard? Is government debt bad? How is GDP measured? Why does the exchange rate change? Why doesn't the employment rate go to zero? What does the employment rate even mean? How do taxes affect the economy? Do different taxes have different effects? What are the arguments for and against using tax policy to encourage saving? What options does the government have to fight a recession? My city wants to reduce driving downtown, what are some possible policies? What economic policies can we use to fight global warming? What are the arguments for and against rent control? What is a monopoly? All of these questions are easily answered with macroecon 101 level knowledge and most are hard to answer without (we haven't even started talking about micro!) That doesn't mean econ 101 is always applicable, but it does mean you'll have a far better understanding of the world after taking it, even if you do come in with some preconceived notions. I will say that Noah's suggestion that econ 101 should be more emperical is a good idea, and I especially believe that there should be a stronger emphasis on stats. I actually think that's true of all the social sciences though, and its a separate issue from what you're talking about.
- 9y ago