Graphs and Equations:

In the 17th century, the French mathematician and philosopher Rene Descartes spent much of his life explaining that equations and graphs are 2 different ways of presenting the same reality. Specially, an algebraic equation describing two variables may also be presented as a curve drawn on a graph. Each and every of the variables in equation can be thought of as one of the axes of graph. The set of points, whose x axis value is first variable and whose y axis value is second, i.e., the set of points for that equation holds, makes up the line/curve on the graph. That line/curve is the equation. So the solution to a set of 2 equations is, point on the graph, where the two curves which represent the equations intersect. Furthermore, you may just as easily move back in other direction, by considering of a curve in terms of equation that produces it. Today economists make very widespread use of these ideas from Rene Descartes’s ‘analytic geometry.’

Right after the end of World War II Professor Paul Samuelson of M.I.T. discovered that a lot of his students were more comfortable manipulating diagrams rather than solving algebraic equations. With diagrams, they could see what’s going on in a hypothetical economy. Considering how a particular curve would shift was frequently easier than thinking of the results of changing value of the constant term in a particular equation.

If you find analytic geometry simple and easy, then Samuelson’s intellectual innovation would make macroeconomics easier to get to you. Behavioral relationships become curvatures that shift about on a graph. Situations of economic equilibrium turn out to be dots where curves describing two behavioural relationships cross (and so both behavioural relationships are satisfied). Changes in state of economy turn into movements of a dot. Understanding economic theories and arguments becomes the same as simple as moving lines and curvatures around on a graph and searching for the place where the correct 2 curves intersect. And solving systems of equations happens to be easy, as does changing the pre-suppositions of problem and noting results.

If you aren’t comfortable with analytic geometry, then you should find other tools to help you think as an economist. Remember that graphs are only tools to help your understanding. If they do not, then you should focus on understanding and manipulating the algebra, or at figuring out and using the oral descriptions of a difficulty. Make use of whatever method feels most comfortable: grab hold of what makes most sense, and identify that all three are ways of reaching the similar conclusions.

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