A Real World Framework
As a young economist I taught graduate and undergraduate students in macroeconomics, monetary theory, international trade and finance, and econometrics. Like other academics, I taught students how to build and manipulate all the textbook models of economic behavior. I did so for three reasons. The models were mathematically elegant, which made them both beautiful and easy to teach. Publishing journal articles about them was the key to advancement in the profession. And, having never set foot in the real world, it was all I knew how to do. Later I ventured into the real world where I learned the models were not always up to the task of helping policy makers, business managers, and investors understand change. While keeping my healthy respect for the limitations of economic models, my colleagues and I developed a framework of our own to guide our thinking. That framework-which is, of course, a permanent work in progress—underlies all of our work.
