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I found that, though most of the time the math technical parts of economics is not a problem for me, I am somehow troubled with extracting the descriptive meaning of formally stated economic statements. I seem to not have the intuition developed enough to read the economic meaning out of formal conditions. This is manifested in macroeconomics. For example, in the class of OLG models, the budget constraints may take many different forms according as scenario (with money, social security,...). Many times, after I saw how simple the economic meaning a sentence conveys either by lecturer in a class or author in a book, I asked myself how I did not see this. On the other hand, microeconomics is much more clearer to me.

So my question is how to develop a proper intuition to extract the descriptive meaning of any given economic formal relation.

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  • $\begingroup$ Interesting question, but I feel is hard to answer. Macroeconomics is very broad itself, so it might depend on the sub-field. Maybe adding a few examples of what type of theories you mean? Also, why is microeconomics clearler to you? $\endgroup$ – luchonacho Oct 15 '17 at 7:57
  • $\begingroup$ @luchonacho. Thks, did not notice. I gave an example for the macro case to illustrate (not just that case! :)). For micro I cannot think of a non-controversial reason to explain why it is clearer to me. $\endgroup$ – Megadeth Oct 15 '17 at 13:56
  • $\begingroup$ I think this question is not quite right. A formal economic model can have different interpretations and can be viewed from different perspectives. So one cannot always talk about the descriptive meaning. $\endgroup$ – Michael Greinecker Oct 16 '17 at 11:40
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I faced a similar issue coming from mathematics where context plays very little role in framing theorems. I was a top maths student. But Econ grad school was difficult for this. The solution I found (and successfully so since I publish well) is to read as much “soft Econ” as possible: policy discussions, business reports, newspaper analysis. Then I went back to formalized economics, and it worked. The conclusion I reached is that economics theorems are very context dependent, and typically cannot be grasped without cultural/policymaking/business context.

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The best advice I've found on the topic have been summed up by the words of Hal Varian.

"In my view, it is impossible to learn economic theory without solving lots of problems"1

The more problems you solve, the more accustomed you will become to economic logic and the language that comes with it.


1. from "What Use is Economic Theory?"

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