Michael Snoyman on Nostr: Real economics (Austrian) examines the behavior of individuals. If we know that a ...

Real economics (Austrian) examines the behavior of individuals. If we know that a group of people tend to always buy car tires and whipped cream together, we treat these as complimentary goods. If the price of tires goes us, all else being equal, the price of whipped cream goes down.

Psychology examines why an individual behaves in a certain way. It can explain why a group of people buy tires and whipped cream together. Economists don’t care why, because understanding the economy doesn’t require that level of individual introspection.

Fake Keynesian economics would observe an overall poetic increase in the transportation sector and drop in luxury food items and recommend going short on restaurants.

#economics #psychology