1% inflation → no problem
2% → still normal
3% → manageable
But when it hits 100%, we call it a “crisis.”
The question is: At what point do things really start to go wrong?
Because every small increase seems “insignificant.”
But according to the Sorites Paradox: If every step is insignificant → the result should also be insignificant.
But it isn’t.
This raises the question: Are economic crises actually driven by psychological thresholds rather than mathematical ones?
Could inflation actually be a Sorites paradox ?
byu/QuantumScribe01 inAskEconomics
Posted by QuantumScribe01
1 Comment
> Sorites Paradox: If every step is insignificant → the result should also be insignificant.
If I take one drop of your blood, does it matter? Two drops? And yet after I take about a liter of your blood you are starting to get in trouble and once I finish off the last of your blood you die.
“Small things add up” isn’t particularly unique to inflation or economics.
> This raises the question: Are economic crises actually driven by psychological thresholds rather than mathematical ones?
Both. Economics is a soft science that deals with human behavior. Human behavior is categorically psychological. That doesn’t make it any less “real” than physics.
The “mathematical thresholds” are merely observations based on people’s behavior. All of the numbers in economics ultimately return to, or derive from, observation of people’s behaviors. The numbers are good when they accurately predict behavior or describe past behavior.