Economics = Mathematics + Psychology or My Psychological New Year Wishes

I am an economist-mathematician by training. Therefore, I know that mathematical equations can describe qualitative economic relationships pretty well. That’s the beauty of mathematics: if you change one variable in a mathematical equation, some other variable in this equation must also change to maintain equilibrium. It is sometimes difficult for people who are not good at mathematics to grasp this essence of economics. This is one of the reasons why there are so many persistent illusions that a portion of freshly printed money or a life in debt will ensure a steady rise in your level of consumption. In fact,…...