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Thursday, October 24, 2002

I am posting a lot about the Trinidad and Tobago budget, I realise. I am not terribly impressed by it, but it does not matter that much in the global scheme of things. In a class today I learned about how people make non-rational decisions, such as the work done by this year's Nobel Prize Winner Daniel Kahneman and his partner Amos Tversky. This is part of the real reason I'm currently studying economics. It fascinates me, and it has even motivated me to learn calculus at my not-so-advanced age. (I could not differentiate a year ago. I'm not all that great at calculus now, but I am progressing.)

Sacha Volokh had a good comment a the end of a post last week about Kahneman, saying that "economics is nothing but applied psychology". Putting dollars and cents aside, economics is fundamentally an analysis of how people make choices under constraints, resource-based or otherwise. In the past century or so economic science has come far, but it's still nowhere near any kind of universal theory on decisionmaking, and there is no reason to suggest that it ever will be. The "dismal science", to use Thomas Carlyle's moniker, can illuminate so many issues, though, that it is worth considering its analysis in most situations. I am not an expert, merely a student (literally); nevertheless I will try to provide as concise and cogent an analysis as I can.

Feel free to comment, though keep it clean. I'd love to hear from you.