Insight - How to think like an economist

The big picture: A truck making its way past stacked containers at the Port of Los Angeles in San Pedro, California. Getting some intuitive sense of the size and scope of American production and consumption will provide a better grasp of GDP and in turn, the world. — AFP

WHEN it comes to “thinking like an economist,” the usual ideas are about supply and demand, prices and incentives, and opportunity cost.

That is all well and fine, but there is another important yet neglected component of the economic way of thinking: an intuitive understanding of the size of gross domestic product (GDP), and a preference for assessing magnitudes as a fraction of GDP.

While economics has a reputation for being pessimistic (the dismal science), most economists I know are pretty optimistic, and tend to see most systems as being robust.