Economics in Action

Art by LetoArt
on DeviantArt,
CC-BY-ND 3.0

Guest post from J. Brian O’Roark, University Professor of Economics at Robert Morris University in Pittsburgh and author of Why Superman Doesn’t Take Over the World.

“Why are they fighting?  Aren’t they supposed to be friends?” My wife and I were watching television when a commercial trumpeting the coming of the movie Batman vs. Superman appeared.  She was understandably confused.  My first instinct was to launch into an in depth dissertation on the comic origins of the battle between DC Comics’ oldest and most renowned heroes.  But her question, innocent though it was, resonated at a deeper level.

As an economist, I am supposed to be able to explain things like unemployment, inflation and the future of Bitcoin, but more fundamentally I should be able to offer some insight into the behaviors of people – even if those people are wearing capes and spandex. I think my wife was happy that her question left me speechless, having no desire to hear about the intricacies of what prompts two men in tights to want to mash each other, but her query needed an answer. As it turns out, the question was perfectly situated for an economist who always wanted to be a superhero.

“Economics…Understand the world around you” is a short video from the Women’s Economics Network, speaking to economists in banking, academia, commerce about what their jobs involve and how their economic thinking is crucial to their work.

Educational philanthropy is a prime example of human generosity and the will to help others. It is especially fruitful when geared into the education and productivity of the youth, and it perhaps seems luring as a break-down of the cynical premise of ‘rationality’ that is the life-blood of conventional economics.

But can good-natured, well-intentioned philanthropy not do the good it is meant to do? Could it even lead to elitism and inequality? Could it be… harmful? On the surface, one is inclined to say no (especially as a donor), but a deeper look is warranted:

(more…)

For this story about the effect of economics in one person’s life, we thank guest author Elena Fernandez Prados for sharing an extract from her new book, Economics through Everyday Stories from around the World. ISBN 978-1523296415

Rachid Benchekroun is a software engineer from Casablanca, Morocco’s largest city. Rachid works for a technology company developing computer games and lives in an elegant villa around the corniche (waterfront promenade), one of Casablanca’s fanciest neighborhoods. But life has not always been easy for Rachid, and at the age of twenty-five, he feels that he has come a long way in life.

Rachid grew up in Casablanca’s suburbs, in a small one-bedroom apartment that he shared with his parents, his three siblings, and two of his cousins from the village. Abdel Karim, Rachid’s father, was a mechanic, while his mother, Fatima, was a homemaker. From an early age, Rachid learned the value of hard work. He attended school in the mornings and helped his father in the garage in the afternoons, oiling engines and pumping tires. At night, Rachid did his school homework diligently under a kerosene lamp. “Study hard, young boy,” his father often reminded him, “for it is the only way that the son of a mechanic from Chefchaouen can become someone in life.” (more…)

If you ask a philosopher for his thoughts on economics or any other social science you are likely, amongst some long words and even longer sentences, to hear the time honed phrase that correlation does not imply causation. If you have not heard it before then you can forgive yourself. Very few economics courses will even mention it, let alone go into any detail. Yet this little statement may be one of the most important problems faced by economists, and in many ways is the single largest problem we will face. So what is it?
(more…)

My colleague Martin sent me a rather interesting link to EDGE World Question Centre 2011. I found two particular articles on Positive-Sum Games and The Law of Comparative Advantage interesting. Below are the links to them:

Stephen Pinker answers “What scientific concept would improve everybody’s cognitive toolkit?” with “positive-sum games”

Dylan Evans answers “What scientific concept would improve everybody’s cognitive toolkit?” with “The Law of Comparative Advantage”

Hope you all enjoy reading this :D