My undergraduate degree is in Economics. Here's my $0.02 on this topic: You can divide the field of Economics into two branches, Microeconomics (the study of

My undergraduate degree is in Economics. Here's my $0.02 on this topic: You can divide the field of Economics into two branches, Microeconomics (the study of how prices and produced quantities are determined in an individual market, for example the market for cars) and Macroeconomics (the study of the overall economy, particularly concerned with overall price level and employment level determination). Microeconomics can be subdivided into partial equilibrium (the "ceteris parabus" assumption, no feedback effects from related markets) and general equilibrium (incorporates feedback effects from related markets). Macroeconomics is then just general equilibrium microeconomics for all markets in an economy + the market for money (MV=PQ equation from the blog). Most of (partial equilibrium) microeconomics was developed by a handful of engineers in the mid 1800s. The math is pretty simple, just differential calculus really, and there are only a few variables - supply is determined by marginal production costs in a production function, demand is determined by individual preferences subject to a budget constraint (income) and the presence of substitute goods. General equilibrium microeconomics came 100 years later and required far more advanced math - the Brouwer fixed point theorem and convex set theory from topology. It was a pretty remarkable achievement. But almost immediately, mathematicians working in economics started finding problems. In a nutshell, the conditions required for an equilibrium to exist, to be unique, and to be stable were incredibly restrictive and almost certainly never met in the real world. If you want to see the math behind this, search for the Sonnenschein–Mantel–Debreu theorem (Debreu was one of the people who developed the original general equilibrium model). Macroeconomics developed alongside microeconomics and much of it was developed before the math behind general equilibrium micro was known. Macro adds the additional complexity of markets for labor (which have several unique qualities vs the market for goods) and more importantly the existence of money (traditional micro models are all barter models). It also adds a time dimension (traditional micro models are non-dynamic equilibrium models with just a short term and long term distinction). Even the most advanced macro models today are still extremely primitive in their assumptions - money is treated simply as a token like any other good or as an advance constraint, time is treated as discrete, etc. Note that I am talking about the core models themselves here. The presence of "market imperfections" such as externalities, monopoly (pricing) power, and asymmetric information (all of which are ubiquitous) have long been known to render the models useless even if all of the impossible to attain core assumptions were met. TLDR: The most advanced economic models all make assumptions that are never actually satisfied in the real world and the math to try and resolve these issues is completely intractable.