"The Perceptive Economist"
Submitted by DeenaD on 06/30/2008 05:21 PM
- Category: Business
- Words: 1495
- Pages: 6
- Views: 31
- Popularity Rank: 1310
"The Perceptive Economist"
If you were asked "What comes to mind when you hear the term national debt'?" how would you respond? Would you say that you spend endless nights tossing and turning in your bed, trying to conjure up ideas for the United States to work their way out of what seems to be a growing liability? Or, are you one of those people who, knowing little about our economy, would say that they heard of the expression, but never really blinked an eye at worrying about it? If you are like me, you may wonder how our economy reached the insecure state it is currently in and what we as individuals may be able to do to help it reach a more stable position. In The Misunderstood Economy: What Counts and How to Count It, Robert Eisner, a past president of the American Economics Association and the holder of an endowed chair in Economics at Northwestern University, assures us that the national debt is not something to lose sleep over. He explains that it is poorly measured and highly misunderstood, hence the book's title. He also makes it quite clear that this book is not intended just for his colleagues and other professional economists. It is on the other hand intended to explain how to "move our nation out of its current economic malaise" (Eisner xiv).
Eisner begins by explaining that most people misunderstand the debt because they commit the fallacy of composition. The fallacy of composition, or the incorrect deduction that what is true of the part is therefore true of the whole, is something that many people make the error of assuming or believing. He explains how the roles of prices and inflation are generally miscomprehended and tells a witty story of a class lecture he once gave his students to demonstrate these particular ideas.
One of Eisner's objectives is to help people understand the idea of the gross domestic product, otherwise known as the GDP. It is important to know how the GDP is counted and what faults may be causing the GDP to be somewhat...
You must Login to view the entire paper.
If you are not a member yet, Sign Up for free!
