Review Commentary

There were a bunch of readings, about what makes a good model; the size of shopping carts, and eskimo words for snow, that were really designed to get your thinking juices flowing. I hope you enjoyed them.
The serious points we made in this section, however, concerned the difficulties that economists have in developing, comparing, and testing theories. For obvious reasons, economists aren't often allowed to design experiments with peoples lives, and this creates problems that researchers in areas such as medicine and physics don't have.
You should now be familiar with the following concepts:
      a) The identification problem.
      b) The sample selection problem.
      c) The search for natural experiments.
For each of these, you should be able to describe in general terms what they are, and why they matter. You should also be able to provide a couple of examples of each. One of my favorite exam questions is to ask students to prove they understand a concept by providing an example that was NOT presented by me or discussed in class. You might like to tackle this question now for each of the concpets listed above.
Over the next couple of months you should also begin to relate debates about theories to these concepts, and build up a number of macroeconomic examples of each concept. Overall, if you were asked why it is that whenever you put two economists in a room you always get three opinions, you should be able to give a coherent explanation.