Questions tagged [political-economy]

a term used for studying production and trade, and their relations with law, custom, and government, as well as with the distribution of national income and wealth.

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79 views

Can machines create value?

Marx wrote that only humans can create value. But why is that so? Ok humans can, with their work, create more value than they need to consume in food and so on, that's obvious. But why is this so ...
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Which metrics best characterise 'socialist' and 'capitalist' economies?

I am interested in finding some metrics that capture how 'socialist' or 'capitalist' a country was throughout modern history, and to include these alongside those in the gapminder dataset, to explore ...
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How long into the past can we trace the effect of institutions?

In one of my courses we recently went through several institutional economic papers (The colonial origins of comparative development, The Slave Trade and the Origins of Mistrust in Africa, The Long-...
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Is Keynesian economic theory still considered capitalism?

When we compare neoclassical economic theory with Keynesian economic theory as they pertain to capitalism, do they both fall within the spectrum of capitalism? or is Keynes's idea of state ...
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30 views

What does 'Health spending as a share of GDP' mean?

I am watching a video essay talking about healthcare spending in different countries and one of the first graphs shown was titled: 'Health spending as a share of GDP'. After doing some reading, I ...
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What was the Summers memo of 1991 sarcastic about?

I have read a twitter thread about Summers memo (wikipedia article) today, and trying to understand the last part (bolded). The problem with the arguments against all of these proposals for more ...
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45 views

Universal basic loan

I'm looking for feedback and critiques of an idea. Universal basic income is an increasingly popular idea, but most agree that it would be terrifically expensive. Assuming that the goal of UBI is to ...
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22 views

Interventions during the current Corona crisis: Government credits

In the light of the current public health crisis caused by COVID-19, I would like to know more about how government or central bank interventions are supposed to influence and limit the economic ...
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111 views

What would happen to US economy before US government lose control over its national debt?

From this wiki page we can clearly see that US national debt is growing steadily after 2010 and now it's larger than US GDP already (at the end of 2019). Still it's commonly believed the debt is ...
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Country specific economic recession/financial crisis data?

Many financial crises are at the global level, yet some of them can be country-specific, especially the ones connected with political instability. For example, the 1990 recession of Russia, the 1958 ...
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Cardinal Voting, Incentive Compatibility and Secrecy

Is there any available/feasible/practical way to make a Cardinal Voting both Incentive Compatible and Secret? A method to make a cardinal voting incentive compatible would be to force them to put ...
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Yang's Impact on Algorithmic Trading?

Presidential candidate Andrew Yang has published the following policy proposals on his website: 1. FINANCIAL TRANSACTION TAX Financial markets have grown dramatically over the past decades. ...
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Why the source profit is not only trade markups?

I'm researching the source of profit. In Marx I've found the following passage: If then, speaking broadly, and embracing somewhat longer periods, all descriptions of commodities sell at their ...
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Arrows Theorem: Dictatorship

How does Arrow's Impossible Theorem show that the only aggregation rule that works is Dictatorship. Couldn't we have a Non-dictatorship with IIA or a Non-Dictatorship with Pareto Efficiency?
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Are there political economy models that include a “majority capture” of (protectionist) trade policy?

A highly cited model of protectionism is the "protection for sale" model or Grossman and Helpman. (For an [updated] evaluation of that model see for instance the Advanced International Trade textbook ...
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48 views

What would happen if a country defaulted on its public debt?

Could someone explain in full detail to someone that does not understand much what would happen if a country refused to pay its pubic debt? Someone told me if this happens banks would fall and ...
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What were the limits of trade and exchange in the Soviet Union? What about other communist countries?

I'm particularly wondering about what implications the abolition of private property had for families. Since private property was to be abolished, I assume houses were not legally allowed to be traded ...
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How will the UK's economy be affected, if it will be a hard Brexit?

Will the outcome of Brexit have any positive impact on the UK market? Are there any available studies on this topic?
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112 views

Key points for a speech on Capitalism [closed]

I was given an English task in which the teacher has asked us to do a presentation/speech on Capitalism. The thing is he didn't specify which aspects (historical, economical and the political) we ...
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Why does China spend so much on agricultural/farming subsidies?

I use the OECD's Total Support Estimates (TSE), which I think is a proper measure of total agricultural subsidies (but correct me if I'm wrong). China's TSE is by far the largest at \$239B in 2017 ...
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1answer
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Military expenditure over time

The following graph from the world bank website shows the world wide military expenditure in percentage of the world GDP over time from 1988 to 2015 I am trying to find similar data over a much ...
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Is it possible to imagine humanity without a modern understanding of money? [closed]

Of course we can't just take money from current world order and give nothing back. In theory, can an advanced civilization exist without money at all? May be this is an utopic idea because of... what?...
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Is utility in neoclassical economics a circular argument/concept?

Neoclassical economics as a utility function that represents a consumer's preference ordering over a choice set. Joan Robinson criticized utility for being a circular concept: "Utility is the ...
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1answer
78 views

Well-informed citizen can contribute better to country's economy?

As the title stated, how can a person from the general public contribute to country's economy by being well-informed? I understand one of the reason would be tax. If a person understands the ...
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What does liberal economic theory say about monopolies?

Ludwig von Mises in his book "Liberalism: In the Classical Tradition" writes that in liberal economic the monopolies are rare and have a tendency to disappear. For an onlooker like me, however, his ...
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Why would a rise in the discount rate stop foreign gold drain and make banks fail?

I am reading "Capitalism and Freedom" by Milton Friedman. In Chapter 3, "The control of Money", Dr. Friedman explains how the Fed exacerbated the Great Depression of the 1930s. In particular: In ...
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5answers
260 views

Does fiat currency disprove labor theory?

From what I understand. LTV predicts that fiat currency, which requires zero labor to produce, should have zero value. Empirically, fiat currency does not have zero value. Would this prove that the ...
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1answer
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Post Brexit Referendum employment theory

According to Chuka Umunna, Labour MP for Streatham and prominent pro-EU campaigner: People were told: "if immigration levels fall, it will be easier to get a job, and easier to get a job that's ...
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Use of DSGE models for the day-to-day government policy decisions? If no - then what are obstacles?

Are DSGE models used for the day-to-day government policy estimation and optimization? E.g. can DSGE model be used for estimation of the return of additional investments in education and how those ...
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216 views

Are white collar workers the blue collar workers of the future?

Edward Luttwak published an essay in 1994, titled Why Facism is the Wave of the Future; he wrote in this essay: Partly because with generational change even senior managers can now themselves work ...
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55 views

How does one asses the impact of a proposed policy?

My State government is considering a new regulatory policy at the moment. We need to put together an assessment of the (likely) economic impacts of the policy. How do we do that? I don't work for ...
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154 views

Isn't it trivial that preferences are single-peaked over two alternatives?

I'm studying Down's Median Voter Theorem which states that if voters have single-peaked preferences over two alternatives arranged along a one-dimensional political spectrum, a majority rule voting ...
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2answers
76 views

What's the term for an economic policy that has negligible effect for most, but a significant effect for a few?

I remember this came up around tariffs in the US on aluminum. They have a negligible effect on the price of an aluminum can, but aggregated across all the aluminum cans sold, it can have a significant ...
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Why is Mises “permitted” to define “Economics is an a priori science”, if a priori is not trustworthy?

Why is Mises "permitted" to define "Economics is an a priori science", if a priori is not trustworthy? In philosophy of science and natural sciences a priori as a method of knowing has long been ...
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1answer
72 views

Would the military be more efficiant if they were unionized?

I hear about the extremely long work hours in the army. I understand it hardens them for readiness for combat situations. With the technology and increase of intelligence need to operate it would a ...
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1answer
142 views

What effect does a wage ratio cap have on the efficency of allocation of labour?

Introduction Wage ratio caps prevent the wages of all employees from exceeding a maximum of a fixed multiple of the wages of the lowest paid employee in a given institution. Wage ratio caps can ...
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What are the logistic implications of using bottle caps as currency?

I have recently been playing the game of fallout 4 and I was struck by an interesting spec of the game. People in the nuclear post-apocalyptic world use bottle caps as barter money. Inquiring a ...
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1answer
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Does the separation of FinCEN, and The Federal Reserve protect the integrity of a representative democracy? [closed]

From my understanding, FinCEN is controlled or heavily influenced by the UN. In addition, The Federal Reserve is not a governmental body, yet it has appointees from the current administration. I'm ...
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What are the Economic reasons and explanations to make a referendum?

Australia is now conducting a survey on same sex marriage, to decide if they take the vote to the parliament or not. Although it is called a survey, the population is treating it as a referendum. The ...
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1answer
107 views

Political theories of inflation

A recent op-ed (paywall) in the Financial Times about inflation stated that (emphasis mine): Across the developed economies, the Phillips curve has gone ignominiously flat. The world's leading ...
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456 views

Quantitative Marxian/Marxist micro and macro economic models?

Are there quantitative Marxian/Marxist/neo-Marxist economic models like Dynamic Stochastic General Equilibrium models or Euro Area Wide (micro-founded) models - that can be used by central banks and ...
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Basis about money

How RBI prints money on what bases? other than changing old money to new money. If price increases and tax increases on what bases they will print more money. Please explain in simple words
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Best strategy to incentivise third party investment

How can governments incentivise NGOs and economic consulting firms to invest in national reserve conservation? I guess this would be more political, but what are the more economic aspects of trying to ...
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2answers
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Adam Smith and universal opulence

Adam Smith seems to be saying that the goal of governing is "universal opulence which extends itself to the lowest ranks of the people," which he appears to think achievable in capitalism with the ...
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How many major economic systems are there?

One of the biggest political debates regards the best type of economic system, which usually boils down to capitalism vs socialism. Are there other kinds of economic systems, aside from more "...
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In what way specifically are US CEO's able to engage in rent-seeking and exploit corporate governance to increase compensation?

I've seen videos where Prof. Stiglitz mentions CEO compensation associated with rent-seeking: https://youtu.be/b7wIw1VNjSk?t=29m58s https://youtu.be/heOVJM2JZxI?t=41m28s I looked on the web and saw ...
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200 views

Keynesian Ethics

Reading Hayek and von Mises I found a bunch of strong arguments against interventionism beyond economics (philosophical and ethical aspects). The technical difference between Classical and Keynesian ...
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Hayek influenced by?

I am going to write an essay about Hayek's views on economic and political (individual) liberty. I am trying to find books to develop a positive discussion on the topic, but I do not know where to ...
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Printing money to put into a Superannuation or UBI fund

It is fiscal policy to keep inflation at between 1-2% (in New Zealand at least) Various tools are used to keep inflation in this range. Let's say the average inflation rate is 1.25% What would ...
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Literature on Private Countries

Amidst Anarchocapitalist authors such as Murray Rothbard, are there any who discuss the possibility of privately-owned countries, with their own set of private laws, police services and courts?