Two sciences, one building
At The University of Kansas, Snow Hall is the home of both Economics and Mathematics departments.
Since I`ve started my undergraduate studies in Economics, I’ve been frequently received two popular opinions: people either think I am really good in Math or they laugh at me because Economists often get their forecasting wrong. It seems a contra census that people have such strong opinions about Economics quantitative techniques that are seemingly opposites. Truth is, both if them are true, and yet both of them are wrong.
Economics does require a lot of Math, which becomes more and more evident as I advance on my graduate studies. However, Economics is far from being an exact Science. The essence of our field is comprehending human decision making process, with regards to scarce resources. Humans are by nature, unpredictable. Thus, it answers the other aspect of my previous argument… Our forecasts are often inaccurate – not wrong, but inaccurate.
They are not wrong, because just like physicist, we divide our predictions in vector forces, in which people have different forces thrusting them in different directions, and an economy is composed by many different people, dealing with their personal trade offs. On the top of all that, there is exogenous uncertainty. So economics predictions are often inaccurate. Even though economists know that, we don’t settle for this reality, and we keep working, and just like in any other field, we improve our methods, learn with our mistakes, revisit theory. We require Math that is even more complex, math that can give us quantitative tools to deal with our object of study, the most unpredictable of them all: human beings.
We share a building in KU, we are two parallel rivers, moving forward together, but only meeting in infinity.