Economists in Context

Economists' approach to economics has evolved over the generations, influenced, of course, by the experiences and historical contexts of each generation. There is always speculation about or cries for a "new economic paradigm," and the recession and financial crisis have ramped this up.

Any new economics that is coming will largely be developed by new economists, those of us who are in the pipelines right now. Upcoming economists will approach the science shaped by our own context. Here are a few things to note about the experiences of today's economists-in-training. (I'll consider myself, age 22, the representative agent.)

-We were in middle school the last time the US government ran a budget surplus.
-Inflation has averaged 2.8% annually over our lifetimes. We did not witness the inflation of the 1970s.
-CDs have payed 0.43% interest rates on average since we graduated college. We're used to earning virtually zero interest on checking and savings accounts.
-Not even our grandparents remember the Great Depression.
-The War on Terror has been with us from middle school to grad school. So has Wikipedia.
-Unemployment rule of thumb: Single digits good, double digits bad.
-We first voted in Obama v. McCain. We didn't get to vote for or against Bush.
-We vaguely remember Clinton and how he "kissed" a woman he shouldn't have. Memories of him signing NAFTA? Not a chance.
-We won't get to work in the lifetimes of Friedman, Galbraith, Samuelson, or Debreu.
-We weren't alive for Reaganomics or the international debt crises of the 1980s.
-We were in diapers during the fall of communism and the Japanese asset price bubble.
-Blogging originated when we were learning to write.
-Gas was $1.90 per gallon when we got our driver's license.
-We rarely if ever enter a physical bank, cash a physical pay check, read a print edition AER, read a print edition anything, bring a pencil to class, or invert a matrix by hand.
-Every time we go to a dinner party someone asks if we have read Freakonomics. We have. Sigh.
-Our mental image of the economy is a trapped thing wedged between the zero lower bound and the debt ceiling.
-Much of our consumption is social, cultural, personalized. We don't necessarily associate consumption with payment, ownership, or private property; we don't necessarily distinguish consumption from production.
-We will never leave finance out of our macro models.