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    Thiagarajar School of Management Madurai: Economic Policies For Managers PGDM - 2022 Batch Recap of Session 2

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    Mamtha Kumar
    The document discusses economic policies for managers. It covers positive economics which explains theories based on evidence and predicts outcomes. It also discusses normative economics which offers prescriptions based on goals and values and is relevant for public policy. The document discusses using experimentation to study the economy and provides examples of classic experiments in economics.

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    Thiagarajar School of Management Madurai: Economic Policies For Managers PGDM - 2022 Batch Recap of Session 2

    Uploaded by

    Mamtha Kumar
    7 views20 pages
    The document discusses economic policies for managers. It covers positive economics which explains theories based on evidence and predicts outcomes. It also discusses normative economics which offers prescriptions based on goals and values and is relevant for public policy. The document discusses using experimentation to study the economy and provides examples of classic experiments in economics.

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    I-2A

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    The document discusses economic policies for managers. It covers positive economics which explains theories based on evidence and predicts outcomes. It also discusses normative economics which offers prescriptions based on goals and values and is relevant for public policy. The document discusses using experimentation to study the economy and provides examples of classic experiments in economics.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    7 views20 pages

    Thiagarajar School of Management Madurai: Economic Policies For Managers PGDM - 2022 Batch Recap of Session 2

    Uploaded by

    Mamtha Kumar
    The document discusses economic policies for managers. It covers positive economics which explains theories based on evidence and predicts outcomes. It also discusses normative economics which offers prescriptions based on goals and values and is relevant for public policy. The document discusses using experimentation to study the economy and provides examples of classic experiments in economics.

    Copyright:

    © All Rights Reserved
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    Thiagarajar School of Management

    Madurai

    Economic Policies for Managers

    PGDM -2022 Batch

    Recap of Session 2
    Art and Science

    Cool Warm
    Heads Hearts

    Empathi
    Analytic
    c
    Art of Economics

    “Artists are people with a genius of


    finding a new answer, a new connection,
    or a new way of getting things done”.

    Seth Godin
    Science Part .

    “Science is the pursuit and application of

    knowledge and understanding of the


    natural and social world following a
    systematic methodology based on
    evidence”.

    Science Council
    Scientific Method

    “We take a handful of sand from the


    endless landscape of awareness
    around us and call that handful
    of sand, the world”.

    Robert M. Pirsig
    Acting Like a Scientist!
    SOME PITFALLS

    Scientific Method
    Association Is Causation Fallacy (1)
    Composition Fallacy (2)
    Ignoring Secondary Effect (3)
    Two Types of Economics?
    Positiv
    e
    Micro Macro

    Normativ
    e
    Positive Economics
    Explaining Economic Theories As It Is And
    Predicting on that Basis. Theories Are Based on
    Observed Empirical Evidence. It Raises Questions Like:

    How the market for onions work?


    Why workers migrate?
    What is the relationship between employment and
    wages?
    Going Beyond Description and Prediction, It
    Offers Prescription Based on Goals and
    Values. Finds Relevance in Public Policy
    Making. It Raises Questions Like:
    Normative
    Economics
    What should be the distribution of income?
    Why Poor People Stay Poor?
    How to Stall Global Warming?
    Also known as the Political Economy. It is about
    Art of application of the knowledge learned through
    Economics economic theories – that is Positive Economics.
    Reaching the desired policy objectives. Most policy
    discussions belong to Normative Economics.
    Economics 1 2 3
    Policies for To understand the
    macroeconomic
    trends and policies.
    To interpret how
    they influence
    firm’s
    To predict and
    factor them in
    business planning.
    performance.

    Managers
    Enter
    Experimentation!
    Relatively a new field in economic policy
    making, it studies the economy through
    controlled laboratory experiments. When that is
    not possible, economists carefully observe the
    economy and try to figure out what is affecting
    what. To do so they look for natural experiments
    – naturally occurring events that approximate a
    controlled experiment where something has
    changed in one place but not elsewhere.
    1. An old experiment in Bihar on Family Planning

    Classic Cases 2. Richard Thaler’s Nudge Theory

    3. Abjith and Esther Banerjee In Poverty Eradication


    of a theory in a more
    Economic models are a
    specific contextual
    framework that places
    setting – or in an

    Economic
    the generalised insights
    economic

    Models principle stated as a


    theory. Economic
    of diagrams or
    mathematical equations.
    models come in the form
    ROLE OF
    MODELS

    S. Gnanaharan

    19
    S. Gnanaharan

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