Various kinds of Economics Papers Students need to write in their Curriculum
The Different Types of Economics Papers
The economy is made up of complex connected interdepended elements. Understanding economics in totality is, therefore, a big accomplishment. The price of tea leaves in any area is determined by different factors such as the cost of production, individual preferences, demand, etc. These factors are affected by other factors, such as the price of fertilizer. All the factors affecting the final product move simultaneously, making it hard to determine what is causing what.
The different analyses and investigated and written as papers. Three economics papers are categorized into theoretical papers, empirical papers, and combo papers. Combo papers present theoretical models that have a related empirical test. There are, however, many exceptions to these papers. Therefore, we will discuss the three papers in detail and how they can be applied in the real world.
The Theory Paper
In economics, a theory paper presents different aspects of the world through a model. These models explain how economic phenomena work. The purpose of the theory paper is to help people understand the world and give them the power to make predictions about it. Many theoretical models include cost-benefit analysis, comparative advantage, and supply and demand. A theory paper can be used to introduce a new model or critic an existing model. Whichever way it is used, it helps people understand the actual economy. In economics, a theory paper can develop a better model for measuring the level of economic activity, how firms behave during different market conditions, etc.
A good example of a theory paper is the Theory of Marriage by Garry S. Becker, where Becker applied the theory of preference in modeling the marriage market. In this theory, the economic motivation presented is that marriage plays an important role in economics, such as labor force, inequality, population growth, etc.
Economists create models just like scientists do to reduce a phenomenon to its elements and combine the elements to produce a model similar to the original one. Different variables are inputs to the models but are determined outside the models. They can be explained as fixed values that do not change over the analysis period.
Through models, one can make predictions about the real world economy, such as future interest rates. They also provide a structure on how and where to look for data. Most of the theoretical papers revolve around mathematics. Economics theories were not always mathematical, and when they were mathematized, there were costs and benefits. The cost side is that not all phenomena can be presented in mathematical terms. On the benefit, side analysis can be done precisely.
The Empirical Paper
The empirical paper provides information about how economic phenomena work. This paper is used to predict the past or the future. Theory papers help us determine how we see the world, make predictions about it and understand it, while empirical papers help us test theories and measure relationships. Many economists working towards becoming good social scientists prefer testing their hypotheses under laboratory conditions. Initially, this was not popular, but currently, it is becoming popular in economics and psychology. People, however, need to collect data from the real world by going through balance sheets, consensus reports, etc and then use different statistical methods to test the hypotheses and models.
In economics, a lot of data come in and can be transformed into numerical terms, but it’s only useful when a relationship between the numbers can be specified. Using statistics cools, economics can focus on the relationships in the data and explain the different links at work. Getting the right pattern of data helps in explaining how the economy works. This analysis can be complex, which is why empirical papers come in to ensure that there are different statistical approaches and tools such as propensity scores, instrumental variables, and regression discontinuity designs.
Randomized trials have become very popular in the field of development economics. The impact evaluations that care caused by such experiments have driven empirical literature to determine what can work in development. Randomized trials have worked in Mexico through their Progresa program, which randomly transfers cash to poor people to support health care.
The Combo Paper
Papers that have both empirical and theoretical components arise under different circumstances. Sometimes, a paper requires a theoretical backbone where the empirical analysis can be relevant. Additionally, the author of the theoretical paper can also analyze some data in order to calibrate the model or test specific implications of the model when applied in the real world. There are also other times when the empirical findings need the generation of a theoretical model to help understand its findings. Economists follow the empirical analysis with a theoretical model when explaining the polarisation of computerised results and automation of subtitles for routine and repetitive tasks. It also helps in providing complement for workers who perform tasks that are skill intensive.
In this article, we have highlighted how different economic papers are used to make predictions about the economy. The three economic papers play different roles in helping people understand how the economy operates in the real world. They enable different models to come up or existing models to be criticised.