Economics as a Science: Generalisations & Predictions

By Bryson Jumbe

Illustration of rising cost of living

Economics is partly a science. Conclusions can be deduced from 'observed facts' on certain economic phenomena such as inflation.

Such 'observed facts' can be the basis for generalising current state of economy and predicting future economic trends.

Some of the 'observed facts' in 2017 for Malawi's economy include the 7.7 percent inflation and 16 percent Reserve Bank of Malawi (RBM) base or policy rate [at which commercial banks borrow from the central bank].

These are facts or data we cannot dispute.

Based on such health economic indicators, generalisations have been made on Malawi's state of economy, which is said to be on a rebound - stabilising and growing.

Likewise, predictions have been given on the expected rate of economic growth.

This is that part of generalisation and prediction. Generalisations can be wrong, and predictions are not realities.

Often, one's economic perspective on these is biased towards political allegiance: the ruling, opposition, and the 'centrists.'

We have heard politicians' views and expert opinions.

Generalisations and predictions can be disputed, but not the reality on the ground of the standard of living of people.

One of Government's principal aims, through its economic policies, is to improve the standard of living of the people.

In fact, this (standard of living) is the only economic language that most people understand when applied in a less technical way.

So, from the facts observed, what is the bearing on the standard of living of the people?