Ulterior Motives

How goals, both seen and unseen, drive behavior

Art Markman is a cognitive scientist at the University of Texas whose research spans a range of topics in the way people think. See full bio

November 4, 2008, Behavioral Economics

Comments on "A user interface for the economy"

A user interface for the economy

By Art Markman, Ph.D. on November 4, 2008 in Ulterior Motives

In the days before the US election, Congress got together to consider yet another economic stimulus package. Once again, they considered sending small checks to many Americans in the hope that spending would stimulate the economy.

Most economists agree that this kind of stimulus package is at best a short term boost to the economy, and that the global economic crisis requires long-term solutions. So, why consider a stimulus package again? I suggest that one reason is that the economy has a poor user interface.

1. Most economists cannot

Submitted by raja r on November 4, 2008 - 7:26am.

1. Most economists cannot agree on whether the economy did well or not in a certain time period.

2. Numbers like the GDP or unemployment numbers,etc do not convey the health of the economy. Those numbers looked very good in 2006/07, when the current crisis was taking effect.

3. From one point of view, the economy is a chaotic system (like the climate) - the smallest action can have large consequences. So the idea that someone can take a snapshot of the economy and take action to correct it is what causes most of the trouble.

4. It would be much better to teach people the fundamental axioms of economics than treating it like some sort of video game.