Freakonomics?

freakonomics

Economics. What is economics?

Textbooks will break out into demand, supply and a hundred graphs you are not likely to comprehend. Let me break it down for you. Economics is 4 words. People respond to incentives. It’s that simple.

My first encounter with economics was a slapdash NCERT textbook written for 9th graders. I’ve come a long way since then, and honestly the more I study the subject, the more enticing it gets. Resources are scarce. Most of us grew familiar with the concept the first time we were handed any pocket money. Rs.500 to spend on an expensive thin crust gourmet pizza or the gorgeous new skirt at the store? So what do you do with 500? This is where it gets interesting. Economics is a soft science. Science because it deals with actions and their subsequent reactions. Increase interest rates, deal with unemployment. Decrease interest rates, deal with inflation. Soft science because these said reactions are heavily dependent on you and me and fortunately (or unfortunately), you and I are hardly as predictable as a laboratory chemistry salt reaction in a test tube. This dynamism is exactly what makes economics so exciting.

That being said, imagine being able to apply something as simple as people responding to incentives to change the course of an entire economy. That is precisely what I hope to be able to do some day.

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