Difference between traditional and modern economics?

Question

.. plz help,got this assignment to answer.

Answer 1

hope this is not too late!

modern economics relies more on technology and is more dynamic. it should be able to adapt to changes quickly. modern economics is also more globalized, meaning u get to work with people in different countries and time zones.

in traditional economics, there has to be a heirarchy, a leader to run the group. thats all i can think of man.

Answer 2

Modern economics tends to be able to use vast computational resources not previously available allowing theory to leave the simplicity of the models prior to the computer.  While the basic models from the earlier period are still in use today and inform modern models, an extensive understanding of time series analysis and panel data analysis allow models to handle information that has long lag times.  For example, a change in the money supply today will still be impacting inflation in seventeen quarters.  That is not trivial, and it also is a bit unexpected.  Older models of inflation persistence do not predict such extreme lag times nor do they have a way to deal with it computationally.

So traditional economics created very simple models that basically worked, but were statistically noisy.  Modern economics has more complex models that predict better, but also probably provide less insight into the basic functioning of the economy and more in the predictive function.