“Think Like an Economist: Financial Literacy and Economic Understanding in an Age of Complexity” explores why financial and economic literacy matter for citizens and why even highly educated people often struggle to make sense of policy, politics, and personal finance. Drawing on new research, Professor Michael McMahon will show that households rely on diverse mental models of the economy that differ sharply from those of experts.
Encouragingly, even modest teaching interventions can align public understanding with economists’ views, improving forecasts and boosting trust in institutions. At the same time, evidence from central bank communication reveals that while policymakers have simplified their language, the underlying conceptual complexity of their messages remains high, making them hard to follow.
Building on the 'three Es' of communication — Explanation, Engagement, and Education — the talk argues that better teaching, clearer communication, and genuine dialogue can help people think more like economists and engage more effectively in today’s complex economic environment.
