Long Luong · 1 min read · Blog Post
Assume a can opener
A fun joke that reminds economists not to make ridiculous assumptions
Stavros Panageas gave an interesting talk about his paper Growth-Indexed Securities. In his talk, he mentioned a joke I found amusing. The joke goes like this:
There are an chemist, a physicist, and an economist stranded on a desert island. They are hungry, but they have a can of beans. The chemist says, “I can build a fire and heat the can so it explodes.” The physicist says, “I can calculate the trajectory of the can and make it explode.” The economist says, “Nonsense, we will lose so much beans. Let’s assume we have a can opener.”
The key takeaway I get from his talk is that we should be careful about the assumptions we make.
So from now on, when reading paper, I will specifically try to understand what are the explicit and implicit assumptions the authors make.
