2.1 economic data

• Economists use models to simplify and explain how the economy works.
• Models are like simplified maps that help us understand complex real-world relationships.
• The tools of economic analysis:

  • Tangible 
  • Intangible 
• Models : 

  • Deliberate simplification of reality 
  • They make certain assumptions 
  • Should be checked against the facts
• Purpose of economic models:

  • To focus on the essentials of how the world functions, in order to draw conclusions about economic behaviour
• Data:

  • Pieces of evidence about economic behaviour 
  • Alert us to logical relationships we overlooked 
• How data interacts with models:

  • They quantify relationships to which models draw attention 
  • They help test models against relevant facts 
• Behavioural law:

  • Sensible theoretical relationship not rejected by evidence over a long period 
• Time Series Data:

  sequence of measurements of the samevariable at different points in time
• time series data shows how a variable changes over time
• Presentation of time series data:

   tables

   charts
• time series data can be easily manipulated
• Cross-section data: Observations at a specific point in time.
• cross section data:

  records how an economic variable differs across (groups of) individuals at a point in time
• cross section data: how variable changes across differentindividuals or groups of individuals
• longitudinal / panel data:

  records how economic variables differ across groups of individuals over time
• Big Data refers to extremely large datasets that are increasingly important in fields like economics.
• Machine Learning helps analyze these datasets. It allows computers to learn from data and make decisions or predictions