Economy, Domestic Economy

Economic Theories, Theorists, Solutions

Economic Theories, Theorists, SolutionsEconomic Theories, Theorists, Solutions

In recent years, there has been a growing trend among top entrance exam candidates as well as students in technical universities in Iran to shift to human science majors such as economics; as a result of which, a considerable number of such people are currently studying, teaching or doing research in top universities around the world.

This rising trend has had both opponents and proponents in the academic circles, whose confrontation peaked in April 2013 when the School of Management and Economics in Sharif University of Technology came close to shutting down amidst debates and political controversies, PhD student in Boston University, Ali Ebrahimi-Nejad wrote in Tejarat-e Farda economic weekly.

The worthy question is what is the significance of the Iranian economists’ presence in the world’s top universities? In other words, what good can come out of the students, who would otherwise be studying electronics and mechanical engineering in technical universities, opting to tackle economic problems in other countries? And more importantly, how can it benefit the country?

  Varied Views

Some believe that unlike engineering fields which entail designing, manufacturing and operating machinery, addressing economic problems and drafting macroeconomic policies does not require familiarity with any scientific principle, arguing that a seasoned politician with a strong intuition would be capable of adopting and implementing correct decisions.

For the sake of this argument, however, it is assumed that the existence of a science called ‘economics,’ mastery of which is essential for handling economic affairs of a country, is accepted by everyone.

Nonetheless, even with this assumption, some experts opine that the economic problems in Iran are so simple and obvious that finding a solution does not require years of academic education and research in top universities and that the basic economic principles and theories mentioned in textbooks are sufficient.

Yet, the current state of economic affairs in the country is clear evidence that this assumption is not true. Surprisingly, the number of existing viewpoints on the ways to tackle recession equals the number of educated economists in the country. Whereas if the problem had an easy and obvious solution, there must have been a consensus among the economists.

Secondly, it would be no exaggeration to say that the disadvantages of having economists with insufficient understanding of macroeconomic and monetary economics are far greater than of those without any economic literacy.

Anyone who has ever attended economic classes is aware that more often than not, people’s intuitions in offering solutions to economic problems are in sharp contrast with what economic theories normally suggest.

There are numerous examples that support this claim. It suffices to engage in a short conversation with those active in the business and industrial circles to realize that they consider injecting liquidity into the market by creating jobs and boosting economic activities the best solution to the ongoing recession.

  Complex Science

If so, why is it then that the government’ economic team lacks this basic intuition and ignores such a simple and obvious solution and avoid injecting more liquidity to the market? Are they not aware of the shortage of liquidity in industrial corporations and the prevalent unemployment among the youth? The answer obviously lies in the fact that economics is a complex science unlike what some might think, and relying simply on intuition and superficial knowledge can result in heavy losses.

Therefore, enrolling in top universities and engaging in deep studies and researches is the best way to develop an organized and scientific mind to solve complex economic problems and remain up-to-date with the dynamic economic theories.

The presence of Iranian students and professors in top universities around the world is promising and is hoped to result in tangible benefits for the Iranian universities and Tehran’s economic policies.