Thinking Big, Remembering Small - From Micro to Macro

Himalaya.
So we are at a very exciting point of think
like an economist because we've just finished Micro Economics Betsy
Stevenson Justin Wolfer's what do you think are the most
important takeaways for Micro?
The big thing for me is all of economics comes
from four big ideas that we started this podcast with.
There's the cost benefit principle, the opportunity cost principle, the
marginal principle in the independence principle, And hopefully what you've
seen over the past few episodes is those four building
blocks create the rest of the edifice that is economics.
So kind of mos like to think about how people
respond to incentives, but it's those four principles and applying
them that help us understand what does it mean to
respond to an incentive?
And I'm wondering, what's your own favorite takeaway from micro.
Mine It's a metal one. Economics is everywhere. I remember
being where our listeners were, having just taken my first
economics course, and I would just go out in the
world and look around me, and whether I was in
a nightclub, at a bar, hanging out with friends, or
walking past the stock market, I saw economic forces everywhere.
You know, the thing that really drew me to micro
is the idea that there's these sad of tools that
can be used to analyze any kind of problem, and
it can give you a systematic structure in order to
understand both how to make a good decision for yourself
but also how to predict other people will behave.
I feel like I've been thinking about my opportunity cost
all the time, so I'm always thinking of like, what
could I be doing instead?
Now, that's exactly what you should be doing. I mean,
I have to admit sometimes it can be a little overwhelming,
but it is the rape frame. You see people make
mistakes all the time because they just forget to think
about their opportunity cast.
And as my hope is that as you've been doing that,
you've come to see yourself making a few better decisions
from time to time. That's things.
So it's kind of made me decide about things more quickly,
like should I really be doing this? Is there a
better thing to be doing with my time? So it's
kind of been really handy actually, So this is awesome.
We've just finished MICRO. Do you have a message for
everyone listening?
One big one? Congratulations you've stuck through it. You came
here to learn to think like an economist. Right now
you can say proudly you can think like a micro economist.
Absolutely, And now we're going to take what you've learned
about your own individual behavior and the choices that people
like you make, and we're going to see what all
those decisions mean collectively for the economy.
That is, we're turning the page and we're moving to macro.
Macroeconomics is the study of the big phenomena gross domestic product, unemployment, inflation,
What causes countries to grow? What are exchange rates? Why
do they rise and fall? The big questions you'll see
on the front page just about any day of the week.
But I want you to realize that the reason we
started with micro is because macroeconomic outcomes reflect millions of
individual microeconomic decisions. People talk about the economy all the
time like it's some sort of third person, but realize
we are the economy. Macro builds on micro while adding
a sharper focus on the interdependence between all of our decisions.
Betsy's right, Macro's about enabling people to live better lives.
And so our next episodes are going to focus on
the long run factors that determine whether an economy performs
well or poorly, will hopefully give you our listeners the
tools to navigate the macroeconomic waters that lie ahead.
Are you excited, Nurs?
I am excited, I will say though, I feel like
a lot of people find the term macroeconomics a little
bit scary.
Yeah, it makes me think of men in suits.
I'm not wearing a suit. Macroeconomics is just when a
lot of microeconomic people get together and live their lives
and we try and describe the whole so there's no distinction.
It's the most interesting subfield or application of microeconomics.
It's a little scary, isn't it, Nurs?
It is because I feel like it's all these big
concepts like monetary policy and fiscal policy and things that
sound a bit abstract.
So now our job, think like an economist, is to
give you our listeners the tools you need to navigate
that terminology and to be able to make good decisions
throughout your lives as macroeconomic conditions change.
Let's get stuck in and we're gonna start with GDP,
so we'll see you all then.
Great, Thanks NAS.
Looking forward to Learning how to Think like a Macroeconomist.
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