ECON 201 Lecture 2: CHAPTER 2 || Rough
18 Oct 2018
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Everything around you that you call life was made by people, and you can change it. All about building intuition; we are discussing the field"s methodology. The scientific method: observation, theory, more observation. Economists use theory and observation; economists can"t really run experiments can"t prove something just because you make a model. The causal channel can be reversed, there might be a third factor, or it could be a complete fluke. Sesame street study: socioeconomic factors, differences in parental behaviour, the character of the child; used the distance to television tower (back in the day) Empirical analysis is hard you have to be able to find situations that are as good as normal experiments. Assumptions can simplify the complex world and make it easier to understand. The art in scientific thinking is deciding which assumptions to make. Economic models omit many details to allow us to see what is truly important. All the models are built with assumptions.
