You are an everyday economist
[Music]
hi
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
more
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
us
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
next
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