You are an everyday economist

[Music]

i’m an economist and this is a talk

about economics

but wait don’t turn off don’t press the

next button

hear me out look i get it

i know that when the topic of economics

comes up most people

shut off and i’m pretty sure

i’m not what you picture when you think

about a chief economist at a major

financial institution

you know a taylor swift loving

millennial mom to a mischievous toddler

but that’s not your fault we’re taught

that

economics is a dry complicated and

sometimes heartless field

i’m here to tell you that actually

economics is accessible to each and

every one of us

and if you open up to the field

you might discover something even more

powerful within yourself

let’s start with the biggest

misconception about economics

that it’s strictly about money

even if you look up the definition of

economics it’ll tell you it’s about the

production

consumption and transfer of wealth

boring and kind of wrong

a better definition of economics the one

i’ve always subscribed to

is that it’s the study of the allocation

of scarce resources in a given

constraint

okay also a little boring but so much

universal basically economics is the

study of

what we do with things that we have in

limited supply

and when we’re given rules around how to

use them

sure money is one thing that most of us

don’t have an unlimited amount of but

what about the planet or

the scarcest resource of all time

economics studies all of these things

and more

but economics is complicated right

don’t you need a phd maybe a beard a

library with leather-bound books

no let me show you

let’s break down the most fundamental

concept in economics

supply and demand the idea that when

supply is low

and demand is high prices rise

and vice versa okay you’re picturing

your econ 101 textbooks your stomach

is dropping but i bet you understand the

concept of supply and demand

just as well as any professionally

working economist

you know who’s not a professionally

working economist

my husband he’s pretty much the farthest

thing from it he’s a painter

an artist and he’s also

a sneaker head now to me a sneaker

is a sneaker but to him the world of

sneakers is a complex web of limited

edition drops and

competition for the most coveted pairs

he’ll be the first to tell you that if a

very rare sneaker is released

very little supply but everybody wants

them

lots of demand well those sneakers could

be worth anywhere from

300 to a thousand dollars

but a regular old pair of tennis shoes

available at any mall

tons of supply little demand well those

fifty sixty dollars max

see my husband the artist well

he’s also an everyday economist

and so are you you make

complex economic decisions every day

sometimes they’re pretty subtle like

have you ever gone to a store

and pulled a product off the shelf and

then thought you know what i’ll just

check on amazon to see if it’s cheaper

and sometimes large disruptive

forces make those economic choices more

obvious to us

i remember in the depths of the pandemic

seeing people

lined up down the street to purchase

coveted

toilet paper at twice the price

coming out of the stores feeling

victorious

these people understood very little

supply

tons of demand equals very

expensive toilet paper

here’s another idea that’s central to

economics that

seems complicated but is actually pretty

straightforward

so lately economists have become

concerned that

our economies are slowing you know back

in the 1970s and 80s north american

economies could easily grow at three

four or five percent and those were

considered good numbers

associated with prosperity lately

our economies have been growing at two

percent

or below it seems we’ve just

lost the ability to grow like we used to

we call an economy’s ability to grow its

potential growth rate and economists

measure

it as the change in labor force

participation rate plus the change in

productivity

okay i’m already bored too so you know

what let’s just throw out the formulas

and from now on when you think of an

economy i want you to picture

your favorite burger joint yes

and the growth rate of that burger joint

is really simply

how many burgers can it make that’s

always going to be a function of two

things

first how many people work behind the

counter

your labor force and second how

fast can each one make a hamburger your

productivity

if you followed this far boom you

understand the concept of an economy

and its potential growth rate and here

comes the fun part

once we know what our potential is the

next step

is to live up to it both as individuals

but also in our economies at large

you know i have this memory of coming

home from school one day with a c minus

on my math test

and my mom taking away my tv privileges

for the day

but then the next day my brother came

home with a c minus on his history test

and

we all went to pizza hut to celebrate i

remember asking my mom what’s going on

she said well sweetheart i have

different estimates of your potential

see my mom at the time a stay-at-home

parent though she

easily could have been ceo of a

multinational if she wanted to be

she was also an everyday economist

how do we make sure that our economies

are not just

living up to their potential but growing

their potential over time

well in my mind we need to have some

pretty big conversations about

affordable and accessible child care

public transportation

competitiveness and even reskilling

and retooling our economy towards a more

sustainable

and inclusive future that’s our real

economic potential

sustainable inclusive not typically

words associated with the dry dreary

world of economics

i remember being a 17 year old who

questioned

whether economics was the right choice

for me

if i became an economist would i be

complicit

in a system that in many ways is deeply

flawed

i even remember an early economics

teacher telling me economics is a

positive discipline not a normative

discipline

or put differently economics just

studies the way the world

is not how it should be

but i am so happy that 17 year old me

took that leap because now i know

economists can be change makers

and just as all architects don’t believe

that all buildings are beautiful or

all artists don’t love every piece of

art

not all economists agree that the

economy is as it should be or even agree

on the best ways

to fix it there are entire subfields of

economics devoted to improving the way

the world works

there’s environmental economics which

seeks to preserve our planet

stratification economics which studies

income and racial inequalities

feminist economics which looks into

issues like the male female wage gap

see not only is economic something that

we can all

understand there is a place for all of

in it so

i haven’t been entirely upfront

this is not just a talk about economics

this is a talk about facing subjects

that seem

daunting like economics head

on about not turning off or pressing

this is a talk about knowing that no

subject

no field no title has intellectual

superiority

over you next time you come against

something that

feels complicated do like you did today

don’t shut off engage if somebody uses a

term

you don’t understand bravely ask them to

put it into terms that you do

find people that make intimidating

topics accessible to you

whether it’s your neighbor who loves to

talk about accounting or

your uncle the mechanic or bill nye the

science guy

ask questions and don’t hold back just

because you think you should know

something that you don’t

chances are you’ll probably catch on

pretty quick

this is a critical moment in our history

there will be more critical moments

ahead it’s going to be hard

but if you can learn economics

in 10 minutes you can do hard

you have all of the tools and now

i hope the confidence that you need

you