Subject: Macroeconomics

Posted by Richard Turnock on 11/2/2010

Message:

Macroeconomics Is Hard
Nov 1, 2010
By Paul Krugman
NYTimes online

“The thing is, no amount of experience meeting a payroll helps you understand issues that are critically affected by the way things add up at a macro level. Businesses are open systems; the world economy is a closed system, with feedback effects that are crucial but play no role in ordinary business experience. In particular, an individual businessman, no matter how brilliant, never has to worry about the fact that total income equals total spending, so that if some people spend less, either someone else must spend more, or aggregate income must fall.”
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Interesting how people continue to use words to attempt to communicate when all the evidence supports using visual tools like dynamic modeling, mind maps, causal loops and other ways to picture systems.

Richard

Follow Ups:

Macroeconomics - Zachary Lawrence 11/2/2010