00:01
Hey everyone.
00:01
Today we're answering problem 26 from chapter one of the textbook, which basically says that suppose you're an economist and you have this issue that you're unfamiliar with and there's no model constructed, what steps should you take? and the hint given, which i write down here, is to think about what a carpenter would do.
00:24
So in thinking about this, the carpenter, well, they would, if they didn't have any model and they were building a wooden structure, they would first, construct a model for how to build the wooden structure and include assumptions about the structures, size, dimensionality, etc.
01:03
So similarly, what we're going to say is that since we don't have a model in this particular scenario and it's an unfamiliar issue, economists, so i'll say in a similar vein, economists would want to construct a model with the help of observations that they have about this unfamiliar issue that is presented, as well as assumptions, which may be unrealistic, but would help us to know the basic mechanism for how things work in this particular issue.
02:00
So as well as assumptions about the model, which may be unrealistic, but that's okay, because these assumptions will help us, or help rather de -economists, basic mechanism or actually not functionality, or how things work in this unfamiliar scenario.
02:38
So that's what i do, and then i think obviously they would then test the model in action and, you know, record the results and draw some basic conclusions.
02:55
Plus make some theories...