Why is economics such a complicated subject?

Question

I have a re-sit coursework I need to do in my first year university course which has to be in in less than 2 weeks and I haven't even started it yet. I have to describe the current situation in the uk economy but there just seems to be so much going on and I just don't even know where to start. If I don't pass this I will probably have to leave university and then I'm ******.

Answer 1

Your question is eloquently put. Economics is a relatively inexact science. Have you ever been in a room full of Economists? Well that is an experience. The differing views is frustrating to say the least. Basically the economist who puts forward a view that cannot be disproved is the winner! Economists generally use the Aggregate Demand Aggregate Supply model as a tool kit to fix the economy. Basically a swag of statistics are analysed from Government sources (mainly) and a conclusion is drawn. The accuracy of this analysis is used to determine policy and advice for Government and industry. Is it always accurate? Definately not. How could any economist have predicted the sharemarket fallout and economic loss to airlines prior to the terrorist attacks in the US? Outside factors such as this cannot always be predicted. Hence, the impact an economist can have is limited.

Answer 2

OK, calm down is the first thing I would say to you (LOL!).

Also, it shouldn't be that difficult. The major things that are crippling the UK economy now are the rising gas and food prices, and the fall in house prices. Discuss how these things have affected the economy. For example, talk about the strikes taking place due to pay cuts and redundancies. This is brought about by inflation, and employers cannot afford to keep on workers.

When you say you don't know where to start, you don't have to discuss everything that is going on in the economy. Just pick a few things like the ones I've mentioned and research them. Check websites, watch the news, read papers such as the Financial Times, etc.

Hope this helps.

Answer 3

Because there is no one answer that fits all. You have to remember that economics is not only equations but also the art of human interaction. Why did people pour billions into DotCom companies that had no profits nor any foreseeable profits (ie: pets.com)?  You can't equate emotions of fear and greed. And that is why economics is always going to be a complicated subject. A subject that changes with the wind. The economy of 18th century America is 100x different than 20th century America.