Lecture 1

THE METHOD AND SCOPE OF ECONOMICS

Tim Harford, the accomplished journalist with The Financial Times, begins his book The Undercover Economist this way:

This is a book about how economists view the world. In fact, there might be an economist sitting near you right now. You might not spot him—a normal person looking at an economist wouldn’t notice anything remarkable. But normal people look remarkable in the eyes of economists. What is the economist seeing? What could he tell you, if you cared to ask? And why should you care?

The use of the masculine pronoun, I have to admit, is a bit odd, even if historically the profession has been male dominated, but that aside … it is very much the objective of our course to see the world through new eyes, or perhaps to use another metaphor to approach it with a new vocabulary and grammar, a new language.

What is economics? That is the question motivating this lecture, and it will be a question that we will repeatedly ask ourselves as the course evolves. The lecture suggests that we might define economics in terms of its methods, or we might also think about it in terms of the substantive issues that the subject traditionally addressed.

In this lecture we begin to exercise our ability to construct abstract models, and use them to address both a very personal question—what determines how much time I spend in getting my morning cappuccino—but also much broader questions—like why are some countries poor, others rich, and how can we promote economic growth to the benefit of all?

Download the Lecture 1 slides here.

Consult the course outline for the readings. Make the first two chapters of Harford’s book the core of your reading, and begin thinking more deeply about economic methods with the help of the book by Dani Rodrick called Economic Rules.