Do You Remember Anything From Your Economics Classes

BakshisMouse

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I'm asking this because I'm just now taking Economics in school, and it intriques me. There are things to economics that just don't get played in the mass media, like inflationary gaps versus recessionary gaps, or the difference between monetary policy and fiscal policy. Like I said, I've just starting to learn, so I don't now a lot about it.

I just wanted to ask the people here if they took economics in school, and if they did, what do they remember?
 

william the wie

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That very little of macro-economics as now constructed is worth anything. And the problem areas are both known and understood:

The horizon of predictability (the length of time the models are good for) seems to have a limit of 90 days and after that butterfly effects screw everything up. That is much too short of a time frame to make sensible monetary, fiscal or tax policy. By using different approaches: age related spending is my favorite but there are many other possible inputs; less accurate but more useful policy predictions can be made.

Of the four parts of the basic GDP equation macro-economics concentrates on G and C because government spending and consumption are much easier to jigger than X-M and NI. However the drivers of long term GDP growth are exports-imports, savings, product life cycles and other things macro-economics generally does not address.
 

expat_panama

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...just wanted to ask the people here if they took economics in school, and if they did, what do they remember?
Fantastic class, you'll love it! You might want to ignore posts like this one--
...very little of macro-economics as now constructed is worth anything...
--except to note how his never having taken the class didn't stop him from having strong opinions aginast it.

My major was engineering and my econ was general ed. The joke was that smart students majored in physics, those that couldn't hack it switched to engineering, and them that couldn't even do engineering transferred to business. Ten years later the business grads were making twice as much money as the engineers that earned twice as much as the physics grads.

I too have retired from engineering and am full time in finance with my econ text book at my fingertips.
 
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BakshisMouse

BakshisMouse

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That very little of macro-economics as now constructed is worth anything. And the problem areas are both known and understood:

The horizon of predictability (the length of time the models are good for) seems to have a limit of 90 days and after that butterfly effects screw everything up. That is much too short of a time frame to make sensible monetary, fiscal or tax policy. By using different approaches: age related spending is my favorite but there are many other possible inputs; less accurate but more useful policy predictions can be made.

Of the four parts of the basic GDP equation macro-economics concentrates on G and C because government spending and consumption are much easier to jigger than X-M and NI. However the drivers of long term GDP growth are exports-imports, savings, product life cycles and other things macro-economics generally does not address.
Fair enough, but what about models like the Phillip's Curve, Production Possibilities Frontier, and Aggregate Supply and Demand? Aren't those still relevant?
 

Sheldon

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Sort of. I remember the basics. S&D, marginal utility, diminishing returns, price elasticity. But without google I'd be completely clueless about half the stuff in this subforum.

Kind of OT, but I wish my econ class in high school would have focused more on personal finance (401K, mortgages, amortization, simple versus compound interest, Roth IRAs, deductions, etc) because most of that stuff has hit me in the back of the head at 100mph since I graduated.
 

Foxfyre

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I took economics in HS and I think 12 hours in college? I loved the course work but that was back in the time when schools were still educating and not sociopolitical engineering. So, there was no political ideology obscuring the points being made and no prejudices or biases built into the lesson plans.

I don't remember all of it all these decades later, but I did get a good basic education in the concepts of free markets, optimum pricing, the law of supply and demand, effect of tax policy and subsidies, etc. that have stuck with me.

It was a good enough education to help me usually discern who is doing political spin and who is talking real economics. I know that everybody with a PhD after his name isn't worth listening to but there are some brilliant minds to learn from still.
 

CrusaderFrank

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Economics and Finance Major and I can say that virtually all of what I learned in college was a waste. Read Berkshire Hathaway Annual report, there's more business sense in any 2 of them then in any 30 college courses
 
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The Phillips curve is not supposed to move. The fact it does means it is irrelevant. It is not supposed to change shape either, but tell that to someone from Brazil or Zimbabwe, where it has a negative slope.

Basically I remember that everything happens at the margin. And understanding the margin is the hardest part of the class.

I just remember all the professors being very liberal, and starting with really stupid simplifying assumptions that took you through the looking glass.

I also remember we used Samuelson's textbook. Man was a colossal bore and was addicted to graphs that were various levels of dishonest.
 

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FDR saved America from Capitalism.
FDR rescued America from the Great Depression!
Nice try, but those are more history class than economics class. Thanks for playing!
Nevermind Crusader Frink, he's pissed that history fails to recognize the greatness of Coolidge, Harding, and Hoover.

What an interesting time to just be getting started in Economics! My Econ101 days spanned through the first Bush stimulus and the collapse of Bear Stearns, also very interesting times. The collapse was unfolding but none of us yet knew how bad it was going to be.

I hope your professor is as excellent as mine was, and welcome aboard!
 

Quantum Windbag

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I'm asking this because I'm just now taking Economics in school, and it intriques me. There are things to economics that just don't get played in the mass media, like inflationary gaps versus recessionary gaps, or the difference between monetary policy and fiscal policy. Like I said, I've just starting to learn, so I don't now a lot about it.

I just wanted to ask the people here if they took economics in school, and if they did, what do they remember?
The biggest thing I got out of economics is that no one really understands it. I think the biggest mistake policy makers are guilty of today is that they try to treat each country as a separate economy, and they make decisions that affect other countries without considering the negative impact that will have on their own country.
 

Douger

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Sure do. I remember thinking " why isn't this asshole a zillionaire instead of ' teaching' a bunch of morons ?"
Understand ?
 
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FDR saved America from Capitalism.
FDR rescued America from the Great Depression!
Nice try, but those are more history class than economics class. Thanks for playing!
Nah, this was what a large part of the lectures were about when we discussed certain key concepts.

The first was the circulation of money and goods. The main theory was that consumers just plain stopped spending, so the government had to (has to)step in and keep the money circulating. The keynsian model that informed the last stimulus works from that model.

the other was the MV=PQ model. The collapse of the banks in feb-march of 1933 was stopped by Roosevelt in order to maintain the level of M. V was in the tank and spiraling down, the banks (the basis of the money supply- M) were folding right and left so with MV shrinking rapidly, therefore PQ was also shrinking rapidly. Roosevelt stopped the MV hemorrhage, and therefore preserved the PQ from disappearing.

Bear in mind with no deposit insurance, when a bank folded, all the money in the bank just vanished.

The new deal was part of the understanding of Keynes' ideas.
 
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BakshisMouse

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FDR saved America from Capitalism.
FDR rescued America from the Great Depression!
Nice try, but those are more history class than economics class. Thanks for playing!
Nah, this was what a large part of the lectures were about when we discussed certain key concepts.

The first was the circulation of money and goods. The main theory was that consumers just plain stopped spending, so the government had to (has to)step in and keep the money circulating. The keynsian model that informed the last stimulus works from that model.

the other was the MV=PQ model. The collapse of the banks in feb-march of 1933 was stopped by Roosevelt in order to maintain the level of M. V was in the tank and spiraling down, the banks (the basis of the money supply- M) were folding right and left so with MV shrinking rapidly, therefore PQ was also shrinking rapidly. Roosevelt stopped the MV hemorrhage, and therefore preserved the PQ from disappearing.

Bear in mind with no deposit insurance, when a bank folded, all the money in the bank just vanished.

The new deal was part of the understanding of Keynes' ideas.
Well, I deleted that post of mine that you quoted because I thought it was stupid.
 

Foxfyre

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I'm asking this because I'm just now taking Economics in school, and it intriques me. There are things to economics that just don't get played in the mass media, like inflationary gaps versus recessionary gaps, or the difference between monetary policy and fiscal policy. Like I said, I've just starting to learn, so I don't now a lot about it.

I just wanted to ask the people here if they took economics in school, and if they did, what do they remember?
The biggest thing I got out of economics is that no one really understands it. I think the biggest mistake policy makers are guilty of today is that they try to treat each country as a separate economy, and they make decisions that affect other countries without considering the negative impact that will have on their own country.
Have you noticed that almost every day there is something unexpected in the news?

New housing starts were below expectations.
Interest rates went up more than expected.
New jobs created failed to meet expectations.
Mortgage foreclosures higher than forecasts.
Bank closures exceed expectations.
Dollar falls below projected level.
New unemployment claims more than expected.
etc. etc. etc.

If all the economic experts are almost always so far off the mark re what we can expect, I think it's time to start asking somebody else what to expect.

Or maybe stop publishing expectations that will almost always prove to be false and, if they disappoint, will almost always have a negative ripple effect throughout the economy?
 
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It is a valid bit of snark both directions. It was an important part of the understanding of the Keynesian dynamic and if you went to school in the late 70's early 80s the whole of the Keynesian argument was coming under severe attack from reality. None of the Keynesian tools were working as advertised. Yes the professors did teach that, and yes the students found it very annoying. And yes the collaps of the winter of 1933 was dramatic and traumatic and needed leadership and yes Hoover just stood there like a deer in the headlight and did nothing. And yes the economy of 1977-1982 was a totally different set of problems which were only aggravated by the cures for a different problem.
 

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I'm asking this because I'm just now taking Economics in school, and it intriques me. There are things to economics that just don't get played in the mass media, like inflationary gaps versus recessionary gaps, or the difference between monetary policy and fiscal policy. Like I said, I've just starting to learn, so I don't now a lot about it.

I just wanted to ask the people here if they took economics in school, and if they did, what do they remember?
I majored in finance and economics. I remember a fair amount. It's helps me a great deal in understanding basic economic concepts working in the capital markets.

However, economics is a limiting discipline in understanding human behavior. You would be well suited to study psychology and sociology as well. Good avenues of study within economics are emerging branches such as behavioral economics and neuroeconomics. You should also take a class or two in economic history.
 

Foxfyre

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It is a valid bit of snark both directions. It was an important part of the understanding of the Keynesian dynamic and if you went to school in the late 70's early 80s the whole of the Keynesian argument was coming under severe attack from reality. None of the Keynesian tools were working as advertised. Yes the professors did teach that, and yes the students found it very annoying. And yes the collaps of the winter of 1933 was dramatic and traumatic and needed leadership and yes Hoover just stood there like a deer in the headlight and did nothing. And yes the economy of 1977-1982 was a totally different set of problems which were only aggravated by the cures for a different problem.
The flip side of Keynesia economics, however, is that once short term deficit spending is implemented to deal with a crisis and spur economic growth and it succeeds, the money is immediately returned to the treasury. The government seems to do the first part very well, but the addiction to the power, influence, prestige, and advancement of one's personal wealth for those in power prevents them from having the will to stop spending and repay the money. Instead they want to keep spending and the debt continues to increase.

And we eventually arrive at a point of diminishing returns in which the interest on the debt wipes out any gains and the economy stalls out with the threat of ever higher taxes, regulation, and expense hanging over the heads of business. At that point, no amount of additional government spending will make things better on any kind of permanent or long term basis.
 
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Brutus

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I'm asking this because I'm just now taking Economics in school, and it intriques me. There are things to economics that just don't get played in the mass media, like inflationary gaps versus recessionary gaps, or the difference between monetary policy and fiscal policy. Like I said, I've just starting to learn, so I don't now a lot about it.

I just wanted to ask the people here if they took economics in school, and if they did, what do they remember?
interestingly,most Econ 101 courses will not equip you to understand the basic economic issues of our time. You are far far better of reading the key books on the subject on your own. Probably the best book is: Capitalism , The Unknown Ideal or Free to Choose. Good luck.
 

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