How do you think like an Economist ?

Question

How to deal with situations like an Economist?

Answer 1

For me, I think in terms of efficiency. For instance, by spending my time typing this question, is it efficient? Can there be a pareto improvement if I spend the time doing other things such as watching a movie? Will I end up with a higher level of utility? Besides this, I find the backward induction technique which we adopt in sequential game particularly useful. Whenever making a competitive decision, look forward and deduce what your competitor is thinking first before making your move. For instance, when I see the 70% Sale banner in Levi's shop, I ask myself, so it means that they are making 70% more than the current price when there is no sale? And you will reconsider of whether to buy the item or not as one will start to doubt the integrity of the shop. I love shopping, unlike other male friends, I tend to compare different shops (atleast 5 to 6 shops) before making a purchase decision on a certain item which I have in mind. Economics is my life, and I find myself a much wiser consumer after studying economics :)

Answer 2

An economist is an expert in the social science of economics. The individual may also study, develop, and apply theories and concepts from economics and write about economic policy. Within this field there are many sub-fields, ranging from the broad philosophical theories to the focused study of minutiae within specific markets, macroeconomic analysis, microeconomic analysis or financial analysis, involving analytical methods and tools such as econometrics, statistics, economics computational models, financial economics, financial mathematics and mathematical economics.

The professionalization of economics, reflected in academia, has been described as "the main change in economics since around 1900." Most major universities have an economics faculty, school or department, where academic degrees are awarded in economics. However, many prominent economists come from a background in mathematics, engineering, business, law, sociology, or history.

The Nobel Memorial Prize in Economics, established by Sveriges Riksbank in 1968, is a prize awarded to economists each year for outstanding intellectual contributions in the field of economics. The prize winners are announced in October every year. They receive their awards (a prize amount, a gold medal and a diploma) on December 10, the anniversary of Alfred Nobel's death.

Economists work in many fields including academia, government and in the private sector, where they may also "...study data and statistics in order to spot trends in economic activity, economic confidence levels, and consumer attitudes. They assess this information using advanced methods in statistical analysis, mathematics, computer programming [and] they make recommendations about ways to improve the efficiency of a system or take advantage of trends as they begin."

It is more difficult to define the professional category of "economists" than to define regulated professions such as engineering, law or medicine. While a lawyer, for example, may be generally defined as a person possessing a law degree and state license to practice law, there is not a legally-required educational requirement or license for economists. In some job settings, the possession of a Bachelor's or Master's degree in economics is considered the minimum credential for being an economist. However, in some parts of the US government, a person can be considered an economist as long as they have four or more university courses in economics. As well, a person can gain the skills required to become a professional economist in other related disciplines, such as statistics or some types of applied mathematics, such as mathematical finance or game theory.

A professional working inside of one of many fields of economics or having an academic degree in this subject is widely considered to be an economist, and any person within any of these fields can claim to be one[citation needed]. Economists are also employed in banking, finance, accountancy, commerce, marketing, business administration, lobbying and non- or not-for profit organizations.

Politicians often consult economists before enacting policy, and many statesmen have academic degrees in economics

Answer 3

Think in terms of incentives.  When you look at a situation, ask yourself which incentives are in place that make these people act this way?  If you have to make a decision, think about how other people's decisions can impact your outcome and decide on the basis of that.

When analyzing macro-level situations, look at the entire picture.  Look at slightly related markets and what's happening there.  Look up and down the supply chain.  Don't take a single look at it and blame it on greed -- that's the opposite of thinking like an economist.

Answer 4

Do not think like an economist. Start studying wealth the way chemists study matter. You will understand the mistakes of economists clearly. You will also find answers to questions for which economists have no answer.