How do you simplify economic concepts for non-experts?

Sorry I am so late to this discussion. At the core to this issue is what you are trying to accomplish. If you recognize that you need to assist policy makers to make decisions based on economic analysis, paramount to your message is to be understanable to non-economic experts. Once you accept that your job is to commuicate the issues to legislators and other non-economists, that is the first response to formulating your message. Thus, you must commuicate the analysis, and this will be the framework to get your message to be effective.

In my experience, relatable examples which the audience is used to helps drive the point across. For example, if I am trying to explain the presence of formal and informal institutions, I have seen that using the example of the popular card game UNO works wonders. The game has fixed rules of how it should be played, i.e the formal institutions which are codified. But based on where people are playing it, and who owns the game, the players may agree to slight variations of the actually rules i.e like informal institutions which are uncodified. And as long as everyone is aware of the rules, their behavior is automatically changed. This requires a good understanding of your audience and their level of general understanding.

Additionally, providing a perspective that resonates with the recipient can further enhance their understanding of economic concepts. For instance, if the recipient is a small business owner, you can relate the concept of opportunity cost to the choices they make in investing time and resources into different projects, highlighting that by choosing one opportunity, they are inherently giving up the potential benefits of the other. By tailoring the analogies and examples to the recipient's specific interests or circumstances, you can make economic concepts more relatable and relevant, fostering a deeper comprehension and engagement.

For premium content (weekly reports) my main tool is to make sure I have a second day available to re-read the analysis with fresh eyes, brain and perspective. There is a lot of info in there that NEEDS to be there, and often it is not easy content. But I find that editing out extra wording or fancy phrases that I may find interesting/insightful can get in the way. In a word: Streamline!

To improve the session's effectiveness, utilize interactivity and relatable examples from daily experiences for a clearer understanding. Also, using assignments is crucial as they serve as valuable tools to grasp the practical applications of a topic." Example: In a personal finance workshop, avoid overwhelming participants with complex jargon. Use relatable examples like budgeting for monthly expenses or planning a vacation to enhance understanding. Assign hands-on budgeting exercises and investment simulations to improve practical application and financial understanding.

For instance, when discussing the concept of trade-offs, you can highlight how individuals often have limited resources and must make choices between different options. By presenting relatable examples, such as choosing between going out for dinner or saving for a vacation, you can help non-experts understand the concept of trade-offs and the inherent decision-making process involved. Connecting economic concepts to personal experiences helps individuals see the relevance and practicality of these concepts in their daily lives.

Explaining it isn't really that difficult. For example, when I explain the concept of 'GDP' during training sessions, I like to engage all participants by sharing candies or something else with them. When you involve the participants and explain to them that, for instance, one candy is something that each of them produces, and let's imagine that we are one economy, that would be GDP. If someone produces two or more candies the following year, that new production represents growth or economic growth.

Acronyms and jargon pose a significant disadvantage in communication. They create barriers, making it difficult for many to understand important information. Rather than clarifying concepts, they confuse and frustrate, hindering effective communication. Utilizing examples, such as explaining Gross Domestic Product (GDP) through tangible scenarios like a country's total annual income, is more effective than relying on obscure acronyms. For instance, imagine a bakery's yearly revenue representing a nation's GDP; it's easier to grasp than the abstract term itself. Such concrete examples facilitate understanding for a broader audience, fostering clearer communication and engagement.

Confucius said, 'Tell me and I forget. Show me and I may remember. Involve me, and I will understand.' It's essential to focus more on this third aspect, involving individuals in the actual act of training or teaching, as that's how they will truly understand. This is something I do quite often.

By providing visuals you are increasing the chances that your explanation gets understood and remembered. In general, people are much more likely to make neural connections on things that they understand in different ways (i.e. visual and math or visual and words).

Generally, people who are reading many articles are more attracted to colorful visuals that convey data quickly, and do not spend as much time on the written sections of the article. Adding certain graphs, maps, or other visual graphics make the article more attractive, and at the same time, more digestible to the layman, who may not be used to reading articles with economic concepts

For instance, you can tell a story about a small business owner who navigates the challenges of a changing market or a household managing their budget during an economic downturn. These stories help individuals connect with the concepts on a personal level, making them more engaging and understandable.

Visuals, such as graphs, charts, provide a clear visual representation of abstract concepts like supply and demand or inflation. They simplify complex data and make it easier for people to understand trends and relationships within the economy. For example, a line graph showing the relationship between unemployment rates and economic growth over time can help illustrate cause-and-effect dynamics. Stories, add context and relevance to economic concepts. Narratives about people and their experiences in the economy help audiences connect emotionally and intellectually with the material. For instance, recounting a small business owner's tale of adapting to interest rate changes clarifies the effects of monetary policy, enhancing relatability.

However, it is also important to acknowledge exceptions or limitations to the concept to provide a more comprehensive understanding. By briefly mentioning these exceptions and explaining why they may not be relevant or important for the current discussion, non-experts can develop a clearer understanding of the concept's general applicability.

Just focusing on the main idea looks good at first glance, but there are exceptions to all economic concepts, and by removing them, we would actually hinder the reader's comprehension of the concept, as they would have incomplete information. Striking that balance, is the challenge we face.

To keep the speech focused on the main concepts and their implications, emphasize simplicity and clarity. Stick to explaining fundamental ideas using real-world and tangible examples. For instance, when discussing supply and demand, illustrate it with a scenario like a busy lemonade stand running out of lemonade on a hot day, driving up prices. Such concrete examples help anchor abstract concepts, ensuring understanding and engagement from the audience.

As they say, any marketing is good marketing. The more engagement we can create from the audience, the more it will spread into the space. Sometimes, more thought-provoking examples will further the article.

To encourage discussion and questions, it's important to give participants the freedom at the beginning of a lecture to contribute to the topic from their own perspective, regardless of whether it's correct or not. It's crucial to stimulate critical thinking, which will be further developed later on.

For most people who haven’t studied it, economics is very much a local concept - for instance national inflation statistics coming down doesn’t help people who see food prices increasing rapidly at their local convenience store. It’s important to recognise that economics is just as much micro as it is macro.

One of the best ways to explain economics to anyone is to simplify with real life basic examples. A classic way to explain the law of diminishing marginal utility in the easiest way would be to use the most basic example found in our school books. If you are really thirsty and you get the first glass of water, you drink it in a sense of urgency almost as if you were dying without it. The desire for that glass of water was too high for you. But, with the second and third glass, your urgency might not be so high and the need to drink that full glass of water will reduce and maybe by the fourth glass you won't even feel like drinking. This is how with every subsequent glass, your desire falls because your thirst has been quenched.