Being an "Economist": The Challenges of Understanding Human Behavior

The amazing painting above is named "Revelation" or "The Watch" (1955), masterfully crafted by Spanish surrealist painter Remedios Varo (María de los Remedios Alicia Rodriga Varo y Uranga)​, who was born in Anglès, Gerona, España, on December 16, 1908, and who died in Ciudad de México, México, on October 8, 1963.

This composition is one of my personal favorites. It shows a clockmaker in his workshop, surrounded by clocks from different historical periods, but all have the same "time," defined by the hour they show. The clockmaker is crafting (or maybe fixing) one of his clocks to capture and measure time, but his attention is drawn now on a mystical swirling blue force that has just appeared in his window as an inspiring force, which represents (in words of Varo herself) Einstein's discovery of the "relativity of time," a shattering new idea about how "time" works and what "time" is. Clockmaker's attention and mind are lost contemplating the implications of this new theory of "time" while his hands try to grab the pieces of the clock he was working on, now falling from his work table.

This image reminded me of myself, working in my office, surrounded by my books on their shelves while developing a model or organizing a dataset for a research idea, and then something new comes to my mind, outside what I was originally working, but giving an innovative and profound significance to my work, a force that serves as a source of inspiration and meaningfulness.

Using this image and linking what Varo created and what I feel every time I see it, I discovered that for me this is a beautiful and inspiring representation of my own work as an economist in Academics. In particular, the clockmaker (economist) in the painting discovers that time (human behavior) is not something concrete to be "trapped" inside the body of a clock or clocks machinery (models), and it is more much abstract and complex than an hour (a unique and straightforward optimal and equilibrium measure). Nevertheless, when the clockmaker (economist) contemplates the complex Einstein's relativity theory and how it embodies as a new theory of the whole and its parts (social sciences as a whole, economics as a piece of this whole), through his work, every clock (model) ever done or crafted will imperfectly represent time (human behavior).

Hence, through the use of a clock/economic model, we are able to -imperfectly- know, measure, and understand the nature and implications of time/human behavior and gather new ideas for improving our lives by acquiring consciousness of our role as individuals beings and as a society as a whole.

-Jorge O. Moreno (January 2018)


"Theoretical Economics" vs. "Real Life": The Perils of Imperfectly Describing, Measuring and Testing Human Behavior

Applying econometrics as the foundation of our scientific method for answering a question from the economics perspective is the result of connecting many pieces; altogether these bits provide some light to the relation of the relevant variables in our analysis.

We need an economic model (which is an imperfect representation of the true human behavior in the population we pursue to study), a database (which is an imperfect representation of the true information embedded in the population we want to study), an empirical specification (which is an imperfect representation of the true economic model we decide using to approximate it in our data) applying an estimation strategy (which through probability and statistics provides an imperfect measure of the true parameter we aim to recover), everything with the only purpose of quantifying and testing the validity of a theory in the reality to find our answer.

As social scientists, we need to be aware of the steps we take in our long path for finding the truth, or otherwise, we run the risk of getting lost. It is crucial what we define as theory, but also, what we identify as reality.  Recognizing all of the above principles allows us as economists to appraise our capacity for understanding the complexity of our society through the scope of Economics, or as F.A. Hayek declared, to comprehend and then "demonstrate what some people believe can control and imagine they can design".

-Jorge O. Moreno (August 2021)