ECON 1BB3 Lecture Notes - Natural Experiment, Scientific Method

• School: McMaster University
• Department: Economics
• Course: ECON 1BB3
• Professor: Bridget O' Shaughnessy

Document Summary

Express ideas in economics: english language, algebra/equations, diagram/graph. Translate between each different form of communication. Ex: when the price of coffee rise, people drink less coffee. Go back to theorize if test theory doesn"t work. (3) Micro: individuals households & firms and how they interact. Macro: economy-wide phenomena such as interest rates, unemployment, money, and growth (4) efficiency vs equity. Efficiency is the size of the pie. Equity is how the pie is divided (5) positive vs normative analysis. Positive: an attempt to describe the world as it is can collect data/evidence. Normative: the world as it should be must make a value judgement good and improve are words that describe normative. (6) model = simplification of reality. Ex: map of a city (7) classify variables. Real variables (these are physical units; relative) vs nominal variables (measured in $) Stock variables (measured at a point in time) vs flow variables (over a period of time)