Recursive economics

Recursive economics is like playing with blocks.

Do you remember when you played with blocks and stacked them on top of each other to make a tower? And then you could take the blocks off the top and the tower would get smaller. Recursive economics is a bit like that because it's all about taking something, changing it, and then seeing how it affects everything else.

But instead of using blocks, we use something called "economic models." These are like blueprints that help us understand how money, goods, and services move around in our economy.

When we talk about recursive economics, we mean that we're looking at how changes in one part of the economy affect everything else. It's like changing one block in your tower and seeing how all the other blocks shift.

For example, let's say that the government decides to increase taxes on luxury items like fancy cars. This change will affect people who buy fancy cars because they'll have to pay more money. But it will also affect the companies that make and sell these cars because there may be less demand for them. And the people who work for these companies may be affected as well, since they might have less work to do if the companies sell fewer cars.

So, when we think about recursive economics, we're not just looking at one part of the economy. We're seeing how that one change affects everything else. It's like playing with blocks and seeing how the whole tower shifts when you take one away or add another one.