Tuesday, November 09, 2010

Ecomomic models only theoretical constructs

Actually, no economic model in our textbooks exists in the real world. Nevertheless, studying theoretical constructs is still very important to understand the real forces of production, exchange and circulation of goods and services in the concrete context of international relations. Of course , formulation of economic policy can never be based purely on theoretical constructs without factoring in specific or even unique circumstances prevailing in the entity where human decision is made. For example, the budgetary and other policy responses in the US and UK to the on-going impacts of the global financial crisis are different although both countries are English-speaking and Christian -majority.


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