Econ Quotes

His jaw clenched. "Okay, so I guess trying to let you down easy was a bad idea--" "This is your idea of letting me down easy? Breaking up with me so you can screw other girls? Without feeling guilty? Are you serious?" "As a heart attack." The last thing I thought before I picked up my econ textbook and hurled it at him: How can he use such a piece-of-shit cliche in a moment like this?

Microeconomics is about money you don't have, and macroeconomics is about money the government is out of.

I’ve been thinking about that proof I spoke of last time – that you’re where you’re supposed to be. And it occurred to me, can you prove you’d be better off somewhere else? If you’d have left the state, your relationship would have ended still. Maybe you’d have even blamed yourself, not knowing that it was doomed because of him, either way. Instead, you’re here. You got dumped, skipped class, and met the best econ tutor at the university! Who knows, maybe I’ll make you fall in love with economics.

The artificial primacy of defense among our national priorities is a constant unearned windfall for some, but it's privation for the rest of America; it steals from what we could be and can do. In Econ 101, they teach that the big-picture fight over national priorities is guns versus butter. Now it's butter versus margarine—guns get a pass. Overall, we're weaker for it, and at enormous cost.

When I registered for econ, I had no idea that I'd be in for this level of reality-show drama. It's like a big fat bonus.

sociology has gone the way of poli-sci and econ, now firmly in the clutches of rabid number crunchers who have abandoned or forgotten the link between their abstruse theoretical musings and the presence of human beings on the planet’s surface;

We don’t have to stop inventing abstract models that describe the behavior of imaginary Econs. We do, however, have to stop assuming that those models are accurate descriptions of behavior, and stop basing policy decisions on such flawed analyses.

This is a part of post-college life that nobody ever warns you about. Your social life is no longer dropped into your lap by virtue of shared classes and extracurricular activities. Relationships, whether with friends, family, or romantic partners—from here on out, they’re going to take a lot more work. No more built-in friends at the sorority, or hollering down the stairs when I need my mom. It’s certainly not going to be as easy to meet guys now that I’m done with school. It’s not like I can just chat up the cute guy in econ class anymore.

I know you sneak Adderall to study all night even though econ makes you want to kill yourself. And now I know you charge thousands of dollars to a credit card you can’t afford just to fit in.

In economics (and in ordinary life), a basic principle is that you can never be made worse off by having more options, because you can always turn them down. Before Thaler removed the nuts the group had the choice of whether to eat the nuts or not—now they didn’t. In the land of Econs, it is against the law to be happy about this!

Its cost is “sunk” and the Econ would not care whether he had bought the ticket to the game or got it from a friend (if Econs have friends).

To a psychologist, it is self-evident that people are neither fully rational nor completely selfish, and that their tastes are anything but stable. Our two disciplines seemed to be studying different species, which the behavioral economist Richard Thaler later dubbed Econs and Humans.

For four decades, since my time as a graduate student, I have been preoccupied by these kinds of stories about the myriad ways in which people depart from the fictional creatures that populate economic models. It has never been my point to say that there is something wrong with people; we are all just human beings—homo sapiens. Rather, the problem is with the model being used by economists, a model that replaces homo sapiens with a fictional creature called homo economicus, which I like to call an Econ for short. Compared to this fictional world of Econs, Humans do a lot of misbehaving, and that means that economic models make a lot of bad predictions, predictions that can have much more serious consequences than upsetting a group of students. Virtually no economists saw the financial crisis of 2007–08 coming,* and worse, many thought that both the crash and its aftermath were things that simply could not happen.

To qualify as Econs, people are not required to make perfect forecasts (that would require omniscience), but they are required to make unbiased forecasts. That is, the forecasts can be wrong, but they can’t be systematically wrong in a predictable direction.

Justice Harold R. Medina stated in 1954 that 'it would be difficult to exaggerate the importance of investment banking to the national econ- omy.'2 This remark remains true today. Investment banks lie at the heart of the capital allocation

Surely micromanaging the school's ranking in "legacy admissions" was not as important as making sure another laughing-gas leak didn't happen in the Econ Building, right? And dammit, if losing a point here and there in "handicapped accessibility" meant that he could avoid another incident like the plane carrying the Women's Studies Department getting hijacked to Panama, he should by all means lose that point! This confused the confused the tribunal, and Frampton realized that this particular incident was actually not due to occur for five more hours. He excused himself to make a frantic phone call in Spanish to an airborne contact, and that embarrassment was avoided. The Women's Studies Department could be dealt with later.

The economics training the students receive provides enormous insights into the behavior of Econs, but at the expense of losing common-sense intuition about human nature and social interactions. Graduates no longer realize that they live in a world populated by Humans.

Econ has been the bane of my existence this whole semester, and now that it's over I feel like I could sing. Except that I can't. So I don't. (Katherine)

hat are the effects of increasing minimum wages?” asks Paul Krugman. “Any Econ 101 student can tell you the answer: The higher wage reduces the quantity of labor demanded, and hence leads to unemployment.

When all economists are equally open-minded and are willing to incorporate important variables in their work, even if the rational model says those variables are supposedly irrelevant, the field of behavioral economics will disappear. All economics will be as behavioral as it needs to be. And those who have been stubbornly clinging to an imaginary world that consists only of Econs will be waving a white flag, rather than an invisible hand.

GOODBYE, THE TRADITIONAL MARKETING! HELLO, NEUROMARKETING!

Everywhere I landed, I didn't really feel like I belonged. Doing postgrad stuff, I felt like I didn't have any skills. Just felt unaccomplished. I was just there to ride out the downturn, and I felt like everybody knew it. Then there's the shame of unemployment. because I wasn't really unemployed. There were plenty of people who were actually looking for jobs. Auntie had lost her job as a tax analyst, turned around and became a nurse. Felt like I was ducking and dodging responsibility. I was just overeducated and useless, taking a job from someone who needed it and deserved it more than me. Got put in a psych ward after a suicide attempt, and when I was in that place, I didn't even feel like I was really depressed or really going through it. Felt like I was faking it to get out of something. Like I was avoiding work. Felt like there was no place for me, because I wasn't capable of working. All my friends who studied econ got jobs overseas, and I was just walking around taking up space.

To an Econ these two policies are identical. If the credit card price is $1.03 and the cash price is $1, it should not matter whether you call the three-cent difference a discount or a surcharge. Nevertheless, the credit card industry rightly had a strong preference for the discount. Many years later Kahneman and Tversky would call this distinction “framing,” but marketers already had a gut instinct that framing mattered. Paying a surcharge is out-of-pocket, whereas not receiving a discount is a “mere” opportunity cost. I called this phenomenon the “endowment effect” because, in economists’ lingo, the stuff you own is part of your endowment, and I had stumbled upon a finding that suggested people valued things that were already part of their endowment more highly than things that could be part of their endowment, that were available but not yet owned.

two apparent devils restrict what you can have - the limited amounts of goods and services available, and the rest of us who also want them.

Econs do not suffer from self-control problems, and so temptation is not a word that exists in the economists’ lexicon. As a result, most of the world’s regulators have not thought much about the problem. But when the dessert cart comes by, we humans often cave. The next thing we know we are fat.

Many economists now openly praise monopolies as a more enlightened form of capitalism. Robert Atkinson and Michael Lind wrote a book titled Big Is Beautiful. They write, “In the abstract universe of Econ 101, monopolies and oligopolies are always bad because they distort prices… . In the real world, things are not so simple.” And to enlighten us, they continue, “Academic economics includes a well-developed literature about imperfect markets. But it is reserved for advanced students,” and these lessons are unavailable to the poor, benighted souls who don't have PhDs.15 It is ironic that the champions of monopolies are essentially aligning themselves with neo-Marxist economists who think that in capitalism the big inevitably eat the small. As the eminent Polish economist Michał Kalecki wrote, “Monopoly appears to be deeply rooted in the nature of the capitalist system: free competition, as an assumption, may be useful in the first stage of certain investigations, but as a description of the normal stage of capitalist economy it is merely a myth.”16 Kalecki would have felt at home in Omaha and Silicon Valley. Buffett and Thiel's views on competition capture the contradictions of capitalism. Thiel's idea that innovation comes only from large monopolies ignores his own personal history at PayPal. He was David creating a startup from nothing and competing against financial Goliaths.

Medina stated in 1954 that 'it would be difficult to exaggerate the importance of investment banking to the national econ- omy.'2 This remark