Economics, 3rd Edition

There is a difference between what economists know and what non-economists know.

t
 This can be summarized under the heading ‘folk economics’. Folk economics is 

the intuitive understanding that untrained people have about how the economy 

operates. If you like, this can be seen as being a novice perspective as opposed to 

an expert one.

Budd makes an interesting observation here. If you (as a non-physicist) were 

engaged in conversation with a physicist who tells you about string theory, you 

are unlikely to interrupt him or her and disagree with what they were telling you. 

An economist engaged in a discussion about obesity, for example, with a non-

economist would be far more likely to be questioned about the views being put 

forward. If I, as an economist, told you, a non-economist, that obesity was caused 

by the rise in poverty levels in countries, it is likely that there would be some 

disagreement with my view. In short, economists think in the subject, whereas non-

economists do not!

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28  PART 1  INTRODUCTION TO ECONOMICS