Experts make elaborate guesswork but often their guess is as good as yours. Presenting some common terms used by economists devoid of their trappings.
Rubin Mathias, Writer
Artwork by Prishi Jain
GDP vs GNP: GDP does not include every transaction in the economy. For example if you buy a used car, that’s not included as nothing new was produced. Another example would be companies buying out other companies and stock trading.
Externalities: Consequences and effects which economists fail to take into account beyond their insulated theoretical world of economic theories. A classic example of an externality is pollution.
Laissez-faire: Literally translated from the French "let do," it refers to the idea of an economy totally free of government intervention, one in which the market forces operate freely and where the choices driving supply and demand, consumption and production are arrived at naturally. Basically an economic dreamland.
Long run: The long run is useful when attempting to defend a pet theory or policy. For example, during times of economic recession, economists might argue against government intervention, saying that in the long run the marketplace will adjust to correct the situation. However, most people live in the short run, and as economist John Maynard Keynes famously said, "In the long run, we're all dead."
Market failure: If things don't go as per the way economists want them to, the result is explained as the result of a market failure. Thus, it's not the fault of the economists, they had it right, the market got it wrong.