Welcome
to the knowledge economy¶
In an introductory economics class, we learn about markets, different market structures, and why firms enter and exit those markets. Important features of markets include any “barriers to entry” that new firms face.
Think of the arts and sciences as an economy, where each discipline, or field, is a market. And each researcher within a field is a firm that produces a product, e.g., art or knowledge, that competes with the output of other firms. New researchers face barriers to entering a field just as a new firm might when they enter a market. Most of the barriers are conventional things like startup costs (e.g., tuition and equipment), regulatory hurdles (e.g., admissions and degree certification), and strategic barriers (e.g., the peer-review process for publishing books and papers).
But the main barrier to entry is just the language used in each field. Even within economics, the language used in various fields appears to change with their specialized concepts, data, tools, and methods. Researchers must be familiar with, read, and speak the language of a field before entering that field to produce useful and novel contributions and ultimately becoming a competitive force.
Macroeconomic Time Frames¶
This course’s logo has 3 rings that represent 3 different time frames that help organize macroeconomic concepts and models.
The first ring has a speed dial that represents short-run economic activity. Macroeconomics in the short run is concerned with the causes and effects of recessions and the immediate responses of various government and central bank policies during the following couple years.
The second ring has two workers who represent the medium-run labor market. After a recession starts, a full recovery of the labor market takes about 2 to 5 years, i.e., the medium run.
The third ring has a graph with an upward time trend to represent long-run economic growth. Countries accumulate capital and experience technological advancement that increase their productivity and drive growth in income per capita over decades, i.e., the long run.