While simple demand-and-supply economic models predict that an increase in the minimum wage increases unemployment, this story looks at what happens to those predictions when you take into account how the increased incomes of minimum wage workers leads to increased demand for business products and services. [...]
The Bank of Canada is changing the sophisticated models it uses to forecast the economy because those models failed to predict "the deep and persistent aftershocks of the global financial crisis" of 2007-2009. This is a perfect example of the quote from Keynes that "Economics is a science of [...]
I started reading Ariel Rubinstein’s Economic Fables. Before reading his description below of what an economic model is, keep in mind that he is one of the world’s foremost game theories, and a former President of the Econometric Society. Economic theory formulates thoughts via what we call “models." The word [...]
