Description

Economists are a group of individuals who took their
mother’s advice to heart a little too literally to grow up and
live in the “Real World.” For an economist, the “Real
World,” or real economy, looks at what is going on once
we strip out the changes in prices. There is good reason to
do this. Imagine the price of every good in the world was
suddenly cut in half. Well, if spending was also cut in half,
then nothing changed for spending really. The same number
of goods still circulated around the economy, only the price
tags changed. It was all just a David Copperfield-esque
monetary illusion. There are important caveats to this idea
that are now being placed center stage in the global
economy.