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Learning economics: cautionary notes

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  1. Contrary to what many people think, economics is only tangentially related to the subjects of finance, business management, and accounting. As a discipline, it is more closely related to sociology and political science.
  2. Understanding economics will not make you notably better than others at making predictions about the stock market or economic recessions. Predictions in these areas are notoriously hard and it would take a lot of effort to reliably do better than the existing consensus of experts. What economics can help you with is reliably understanding some of the mechanisms of operation and the effects of policies on economies.
  3. The subject of economics is very politically charged, because of the significant extent to which economics affects the daily lives of people and the decisions of democratically elected governments. As a result of this, a lot of books in the market that claim to be introductions to economics may in fact be attempts to sell a particular form of economic doctrine.
  4. The topic of microeconomics is well-understood, but the topic of macroeconomics -- the large-scale operation of the economy, including such issues as money, inflation, unemployment, and business cycles -- is both poorly understood and controversial. There are many different schools of thought even within mainstream economics, and even more at the fringes. For this reason, we strongly recommend that you begin your study of economics by focusing on the key ideas of microeconomics and only then proceed to understand the different schools of macroeconomic thought.
  5. Basic economics does not require much mathematics. However, in order to delve into economics beyond the basics, you will need to have a strong mathematical background. If you are interested in economics beyond the basics, therefore, you should make sure to learn mathematics well.