Greg Mankiw

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Greg Mankiw

Nicholas Gregory Mankiw (born February 3, 1958) is an American economist and Professor of Economics at Harvard University.

Quotes[edit]

  • After more than a quarter-century as a professional economist, I have a confession to make: There is a lot I don’t know about the economy. Indeed, the area of economics where I have devoted most of my energy and attention — the ups and downs of the business cycle — is where I find myself most often confronting important questions without obvious answers.

Principles of Economics[edit]

  • The management of society’s resources is important because resources are scarce. Scarcity means that society has limited resources and therefore cannot produce all the goods and services people wish to have.
    • Ch. 1 : Ten Principles of Economics
  • Economics is the study of how society manages its scarce resources. In most societies, resources are allocated not by an all-powerful dictator but through the combined actions of millions of households and firms. Economists therefore study how people make decisions: how much they work, what they buy, how much they save, and how they invest their savings. Economists also study how people interact with one another.
    • Ch. 1 : Ten Principles of Economics
  • There is no mystery to what an economy is. Whether we are talking about the economy of Los Angeles, the United States, or the whole world, an economy is just a group of people dealing with one another as they go about their lives.
    • Ch. 1 : Ten Principles of Economics
  • Principle 1: People Face Trade-offs…
    Principle 2: The Cost of Something Is What You Give Up to Get It …
    Principle 3: Rational People Think at the Margin…
    Principle 4: People Respond to Incentives…
    Principle 5: Trade Can Make Everyone Better Off…
    Principle 6: Markets Are Usually a Good Way to Organize Economic Activity…
    Principle 7: Governments Can Sometimes Improve Market Outcomes…
    Principle 8: A Country’s Standard of Living Depends on Its Ability to Produce Goods and Services…
    Principle 9: Prices Rise When the Government Prints Too Much Money…
    Principle 10: Society Faces a Short-Run Trade-off between Inflation and Unemployment
    • Ch. 1 : Ten Principles of Economics
  • Economists try to address their subject with a scientist’s objectivity. They approach the study of the economy in much the same way a physicist approaches the study of matter and a biologist approaches the study of life: They devise theories, collect data, and then analyze these data in an attempt to verify or refute their theories.
    • Ch. 2. Thinking Like an Economist
  • To find a substitute for laboratory experiments, economists pay close attention to the natural experiments offered by history.
    • Ch. 2. Thinking Like an Economist
  • Assumptions can simplify the complex world and make it easier to understand.
    • Ch. 2. Thinking Like an Economist
  • The art in scientific thinking—whether in physics, biology, or economics—is deciding which assumptions to make.
    • Ch. 2. Thinking Like an Economist
  • The economy consists of millions of people engaged in many activities—buying, selling, working, hiring, manufacturing, and so on. To understand how the economy works, we must find some way to simplify our thinking about all these activities. In other words, we need a model that explains, in general terms, how the economy is organized and how participants in the economy interact with one another.
    • Ch. 2. Thinking Like an Economist
  • In this model [circular-flow diagram], the economy is simplified to include only two types of decision makers—firms and households. Firms produce goods and services using inputs, such as labor, land, and capital (buildings and machines). These inputs are called the factors of production. Households own the factors of production and consume all the goods and services that the firms produce.
    • Ch. 2. Thinking Like an Economist
  • The production possibilities frontier is a graph that shows the various combinations of output … that the economy can possibly produce given the available factors of production and the available production technology that firms use to turn these factors into output.
    • Ch. 2. Thinking Like an Economist
  • An outcome is said to be efficient if the economy is getting all it can from the scarce resources it has available. Points on (rather than inside) the production possibilities frontier represent efficient levels of production.
    • Ch. 2. Thinking Like an Economist
  • Microeconomics and macroeconomics are closely intertwined. Because changes in the overall economy arise from the decisions of millions of individuals, it is impossible to understand macroeconomic developments without considering the associated microeconomic decisions.
    • Ch. 2. Thinking Like an Economist
  • Positive and normative statements are fundamentally different, but they are often intertwined in a person’s set of beliefs. In particular, positive views about how the world works affect normative views about what policies are desirable.
    • Ch. 2. Thinking Like an Economist
  • Making economic policy in a representative democracy is a messy affair—and there are often good reasons presidents (and other politicians) do not advance the policies that economists advocate. Economists offer crucial input into the policy process, but their advice is only one ingredient of a complex recipe.
    • Ch. 2. Thinking Like an Economist

External links[edit]

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