why econ?

During a recent doctoral course, we were asked by the professor why we are in econ. Used to go with the flow, it was kind of a good mental exercise to practice. And, what is more, going back to simple, basic questions refills you with motivation to move on and follow your purpose.

Some interesting arguments showed up. The professor himself recalled he wanted to understand growth - "why some countries grow more than others?". Other colleagues coming from different corners of the world referred to their own countries' experiences: "I come from Russia and I wanted to understand the transition process", "I come from Argentina and I wanted to understand the big 90's crisis and the huge inflation we experienced". Some more philosophical answers referred to the morals of economic decisions, freedom, motivation and incentives.

So, I have got inspired and asked it to my master students. Why econ? Among answers, I recall arguments which went in the following directions: "I find of great importance to understand the economic policies the government implements and the motives which stay behind - they affect all of us", "I think it's very interesting to model the real world in a system of equations and find the equilibrium". Inspiring answers can arise from very basic questions. Keep it simple, as they say!

Myself, I also referred to my origins. Even if, on a more sincere tone, starting studying econ during bachelor was a random decision, like for the majority of my generation. But it was a lucky one - "appetite comes by eating"! So I answered something like: I come from Romania, where I find of great relevance the difference among generations - there are the young people, the 2.0./3.0 generation which seeks freedom and adors capitalist-like, right (center-right) policy decisions; and there is the old generation, which has the nostalgy of communism and still believes in the power of the government to create their well-being. The latter are those who prefer left (center-left) decisions and are ready to vote for the candidate who offers them a bundle of food, exactly prior to elections. There results a goverment and a set of policy measures which have to satisfy two types of consumers, two types of workers and, ultimately, two types of investors (rich people are mainly from the old generation, the so-called "people with network", who had THE information after the communism fall to "take the GOOD opportunities").

Now, when I try to put down my idea from then, some interesting research topics come up in my mind. What are the implications of this kind of arrangement on income inequality? Considering the assumption that there are two kind of consumers, workers, investors, could we model, in an overlapping generations setup, a more realistic equilibrium? Could there be implemented a set of policies which provides differentiated incentives for the two categories a la Akerlof or Spence?