whats the point of learning,studying, or even having macroeconomics if the whole science is based on faith?whats the point of learning,studying, or even having macroeconomics if the whole science...

whats the point of learning,studying, or even having macroeconomics if the whole science is based on faith?

whats the point of learning,studying, or even having macroeconomics if the whole science is based on faith?

Asked on by hhhhh786

3 Answers | Add Yours

litteacher8's profile pic

litteacher8 | High School Teacher | (Level 3) Distinguished Educator

Posted on

I agree that it's not clear that the system is based on faith.  It is supposed to be scientific.  However, it is based on a lot of unproven theories.  In the real world, wrenches often get thrown into the works and things don't work the way they are predicted to work.

pohnpei397's profile pic

pohnpei397 | College Teacher | (Level 3) Distinguished Educator

Posted on

That's a good question.

First of all, not all economists would agree with me that it IS based on faith.  So they think they KNOW what's right.  Unfortunately other ones who disagree with them also KNOW they're right.

My take on why study it is this: if we didn't, we'd know even less than we do now.  For example, we know that certain monetary and fiscal policies will generally have some impact on GDP, inflation, etc.  And it's generally known which way they'll impact those things.

If no one studied macro, we'd never have found those things out.

Now, where faith comes in is how much of an impact those things have and if there's some better way of trying to get that same impact.

Overall, then, my argument would be that it's better to know something than nothing.  If it were not for macro, no one would have any clue about what to do when the economy goes bad.

I should also add that there are many areas on which essentially all economists agree.  A major macro area where most economists agree is on the need for free trade.  It's just that we don't hear about those areas of agreement very much.

krishna-agrawala's profile pic

krishna-agrawala | College Teacher | (Level 3) Valedictorian

Posted on

I do not know, how you have come to the conclusion that the whole science of macroeconomics is based on faith. At time it is necessary and to accept some things on faith. For example, I  do not know how Einstein arrived at the formula E = mc^2, but I accept it on faith. But this does not mean that this formula or so many other things I have faith in have no logical basis, or are not representing the reality.

Further, by definition neither economics in general or macroeconomics is based o faith. Let us consider the definitions of economics and macroeconomics given by Samuelson and Nordhaus:

Economics is the study of how societies use scarce resources to provide valuable commodities and distribute them among different people.

Macroeconomics is a branch of economics concerned with the overall performance of economy.

Now study of how economies work and their overall performance, has to be some kind of actual study and not faith. Typically for such study economics uses methods like observing behavior of individuals and groups of people, drawing statistics and making statistical analysis, and drawing logical conclusions. These are all valid method of scientific investigation. All this cannot be dismissed as "just faith".

I am ready to concede that there are things that I may not have ascertained for myself and still accept them on faith. But that is my limitation, not that of the subject of economics itself. Therefore, It is no correct to say that whole of macroeconomics, or even substantial part of it, are based on just faith. Economics is based on study of facts and logic, that provides us many useful insights and methods to make our economies more prosperous, and improve the condition of people.

Source:

Samuelson P.A. and Nordhaus W.D., Economics (2005), Eighteenth Edition, Tata McGraw-hill, New Delhi.

 

 

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