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115 votes
16 answers
21k views

How will non-rich citizens make a living if jobs keep getting replaced by robots and are outsourced?

Decades ago a factory job could support a wife and kids until retirement and they offered insurance, benefits, etc. Now, no more unions, those jobs as well as tech and customer service jobs are ...
Bruno1993's user avatar
  • 1,351
101 votes
9 answers
40k views

If women are paid less for the same work, why don't employers hire just women?

If women are paid less for the same work, why don't employers hire just women? Do employers decide to lose profits just out of sexism, in feminists' and researchers' opinion? It doesn't make sense to ...
Sergey Zolotarev's user avatar
83 votes
20 answers
17k views

What are some results in Economics that are both a consensus and far from common sense?

What are some results in Economics that are both a consensus between most economists and far from common sense? I would also welcome suggestions of clear definitions for what we should mean as ...
75 votes
13 answers
26k views

Fundamental equations in economics

For the other sciences it´s easy to point to the most important equations that ground the discipline. If I want to explain Economics to a physicist say, what are considered to be the most important ...
Lumi's user avatar
  • 2,799
74 votes
5 answers
18k views

Why is the oil future price negative?

I don't understand why the price of oil futures went negative today. News say it is because sellers cannot sell it. But, why don't they just hoard it until the coronavirus crisis is off? Why don't ...
chatGPT's user avatar
  • 1,344
69 votes
23 answers
21k views

Criticism of Math in Economics

I've been reading and speaking to a number of educated economists and economics PhDs who are against the use of intense mathematics and mathematical proof in economic theory. Specifically I've been ...
EconJohn's user avatar
  • 8,407
68 votes
4 answers
14k views

Why do economists disagree so much?

I'm coming at this from a scientific point of view, having had no formal training in economics - most of what I know about it was from self-studying an undergraduate economics textbook. My question ...
Allure's user avatar
  • 1,302
56 votes
7 answers
11k views

Why do Australian milk farmers need to protest supermarkets' milk price?

Sorry this might be borderline off-topic (and I am an economics layman at best), but I found this rather puzzling and would like to know why this is happening. I just came across an article which ...
FriendFX's user avatar
  • 571
51 votes
10 answers
4k views

Seminal papers that later were proven to contain errors

I was reading on institutions, and I came across Acemoglu, Johnson and Robinson (AJR) paper on The Colonial Origins of comparative development: An Empirical Investigation, and this paper seemed so '...
An old man in the sea.'s user avatar
50 votes
8 answers
9k views

How do economists explain why people contribute to Wikipedia?

What incentives do contributors have? I believe they earn no money. And usually, they earn no reputation either, because most of the contributions are anonymous. I believe this is a public goods game. ...
user avatar
49 votes
2 answers
30k views

What is structural estimation compared to reduced form estimation?

I've heard a lot of definitions given for structural estimation. But it's never seemed entirely clear to me. Some times I've heard that what one person might call "reduced form" estimation should ...
jmbejara's user avatar
  • 9,355
47 votes
7 answers
8k views

Is zero inflation desirable?

Is zero inflation really desirable? To be more precise: Does inflation in real life have benefits that in some situations outweigh its social cost? E.g.: it works as a disincentive against holding ...
Giskard's user avatar
  • 29.4k
44 votes
11 answers
8k views

What is the economic purpose of increasing the minimum wage?

It is generally accepted among economists that minimum wage warps the equilibrium point between the supply and demand of labor by instituting a price floor and increases unemployment for unskilled ...
Mathematician's user avatar
43 votes
3 answers
9k views

Why is healthcare so expensive in the USA?

I find this phenomenon to be kind of puzzling. USA is one of the countries with one of the highest purchasing powers in the world, yet when it comes to healthcare an standard US citizen is likely to ...
user2638180's user avatar
39 votes
2 answers
7k views

Why does Taiwan dominate the semiconductors market?

The recent visit of US politician Nancy Pelosi to Taiwan generated a lot of news about the dependence the world has on Taiwan, given its dominance of the semiconductor market. But I couldn't find ...
sourcream's user avatar
  • 511
38 votes
5 answers
11k views

Did real incomes drop significantly since the 1950s?

From what I heard, in 1950s America, you didn't have to go to college to support a large family and a stay-at-home wife. People could buy houses easily, drove giant cars and didn't worry about gas ...
MWB's user avatar
  • 536
38 votes
3 answers
2k views

Is a universal basic income possible in the United States?

Is a universal basic income or unconditional demogrant possible in the United States? (For the sake of specificity I have focused the question on the US, though the question is certainly interesting ...
jmbejara's user avatar
  • 9,355
37 votes
10 answers
9k views

Why do we need to "get the economy moving again"?

Sorry I have no background in economics but as a computer programmer, I specialise in building models out of simple math and logic, so I hope we can speak the same language without having to get into ...
Andy's user avatar
  • 471
37 votes
6 answers
12k views

If someone goes for a haircut, does it increase GDP?

If I go for a haircut, am I causing the GDP to rise because consumption is rising?
ROHAN PAUL's user avatar
35 votes
9 answers
1k views

Are there any non-paywalled reputable economics journals?

I'm contributing to another open-source economics project, and was looking to compile a list of primary sources for modern developments in the field. Basically something to help bridge the (...
Jason Nichols's user avatar
33 votes
6 answers
13k views

Why do celebrities get high wages?

In the youtube video Why We Look down on Low Wage Earners the author argued: "economics states that wages are determined [...] by the number of people willing and being able to do a given job that ...
Stephan Kulla's user avatar
33 votes
6 answers
3k views

What benefits do governments receive from not eliminating debt?

Most major economies have substantial government debt; for example among the OECD countries the lowest debt rate is Estonia with around 6% of GDP. Now we may be in a global recession at the moment, ...
curiousdannii's user avatar
33 votes
3 answers
32k views

Why aren't house prices included in CPI?

Swedens central bank recently lowered their prime rate to -0.25% from -0.10% in an effort to avoid deflation. At the same time, house and apartment prices are higher than ever, up 11% last 12 months,...
Mårten's user avatar
  • 431
32 votes
3 answers
5k views

What has caused the recent 25% unemployment rate in Spain?

The unemployment rate in Spain has recently been fluctuating around 25%. What has caused this?
Gergely's user avatar
  • 579
32 votes
2 answers
43k views

How can I obtain Leontief and Cobb-Douglas production function from CES function?

In most Microeconomics textbooks it is mentioned that the Constant Elasticity of Substitution (CES) production function, $$Q=\gamma[a K^{-\rho} +(1-a) L^{-\rho} ]^{-\frac{1}{\rho}}$$ (where the ...
Huseyin's user avatar
  • 743
31 votes
10 answers
16k views

A law against selling any house cheaper than it was bought for, what consequences would that have?

I'm looking for a more general and principled answer and use Scandinavia today only as a sketchy example of the kind of scenario I'm asking about. I live in Scandinavia where house prices has had an ...
LocalFluff's user avatar
31 votes
4 answers
9k views

Are there historical cases of country A printing the currency of country B for the main purpose of economic warfare?

I recently read in a news article that a large amount of Libyan banknotes printed in Russia were seized in Malta following an order coming from the USA. Both Russia and the USA have geostrategic ...
Genorme's user avatar
  • 413
31 votes
8 answers
8k views

If no one knew about inflation, would inflation take place?

I’m not an economist and would like some insight into this thought experiment. If people, the news, social media, etc. suddenly stopped talking about inflation, would inflation still take place? ...
GMoss's user avatar
  • 421
31 votes
4 answers
5k views

From an economics perspective, what are the ramifications of a currency with fixed money supply?

I'm thinking specifically of bitcoins. What are the pros and cons of having a fixed number of coins, as opposed to more "normal" currencies? Would the currency have no inflation?
Jason Nichols's user avatar
31 votes
3 answers
14k views

How to intuitively understand the 'Intuitive criterion'?

The intuitive criterion by Cho and Kreps is a refinement to minimise the set of perfect Bayesian equilibria in signalling games. What would a simple and intuitive example to explain this criterion be? ...
Bravo's user avatar
  • 1,699
29 votes
6 answers
7k views

Why is a stock market crash so bad?

Many folks speak about potential stock market crashes when central banks raise interest rates. I am not a graduate economist nor do I pretend to understand it, but I am definitely curious about what'...
Hairi's user avatar
  • 425
29 votes
4 answers
6k views

Why do people buy negative interest rate bonds?

I get that people buy long term government bonds, because of how safe it is, and if there would be a recession the government would just print more money and could pay it back. But why would anyone ...
curiousTrader's user avatar
28 votes
10 answers
13k views

People pathologically hoard so much cash that they impoverish the entire nation

"If a man has an apartment stacked to the ceiling with newspapers we call him crazy. If a woman has a trailer house full of cats we call her nuts. But when people pathologically hoard so much cash ...
Bob L.'s user avatar
  • 297
27 votes
9 answers
8k views

What's wrong with the "airline marginal cost pricing" argument?

This is a very common argument found in introductory classes and texts. Here's Mankiw's version: Thinking at the margin works for business decisions as well. Consider an airline deciding how much to ...
user avatar
27 votes
13 answers
11k views

Why do banks take deposits if they do not need them to make loans?

I have taken some economics courses in university, where I was introduced to fractional-reserve banking. From my understanding, in fractional-reserve banking, the bank has motivation to encourage ...
Flux's user avatar
  • 553
27 votes
1 answer
542 views

How do Gini coefficients correlate with the cost of higher education?

Are there any studies that explore the higher net present value (NPV) of education in countries with higher Gini coefficients? Additionally, do any of these studies include the impacts of economic ...
Jason Nichols's user avatar
26 votes
5 answers
5k views

Why is the spot price of electricity determined by the highest price that gets offered? Can't they scale it according to the actually offered prices?

most energy markets work using "spot markets", where everyone puts in an offer for how much electricity they can provide and at what price, and then everyone gets paid the highest price ...
Nzall's user avatar
  • 373
26 votes
4 answers
8k views

Could eliminating all taxes and only creating new money theoretically work?

Imagine you had the opportunity to found a new country from scratch (in 2020). Value exchange would be digital, where only the state can create new currency units. Instead of relying on income tax ...
Nico's user avatar
  • 369
26 votes
10 answers
7k views

What are examples for the phenomenon that more (or better) information makes everybody worse off?

More information is usually considered "better". Let's say a rational agent chooses optimally given his information on the circumstances of a particular decision problem. Then providing him with more ...
VARulle's user avatar
  • 6,994
26 votes
4 answers
5k views

How can power/electricity prices be negative?

Bloomberg shows this chart: I understand the above chart to mean that consumers were actually paid to use electricity. (Please correct me if I'm mistaken.) I was wondering how this is possible? How ...
user avatar
26 votes
4 answers
84k views

Partial vs. general equilibrium

Microeconomic models are usually classified as partial and general equilibrium models. As a layman, I understand that partial equilibrium focuses attention on a few economic variables to find the ...
Bravo's user avatar
  • 1,699
25 votes
5 answers
8k views

Why is fuel more expensive on the high way in Europe?

In Europe it's usual, that fuel prices are 10-20% higher on the highway, than in the city. This is not only my personal observation, but also mentioned on travel sites (eg here and here). I don't have ...
Torin42's user avatar
  • 353
25 votes
4 answers
147k views

What are FOCs and SOCs?

I keep seeing the terms first-order conditions and second-order conditions used in my undergrad economics class on production functions, monopolies, etc but I have no idea what these terms mean. It ...
Stan Shunpike's user avatar
25 votes
2 answers
3k views

Should we expect more structural technological unemployment if growth becomes more limited by natural resources and less by labour?

Technological unemployment, where unemployment arises from (with some oversimplification) workers being replaced by machines, has so far been temporary as new jobs were created that replaced the old ...
gerrit's user avatar
  • 1,754
24 votes
7 answers
12k views

How does Black Friday work?

On days like Black Friday, everyone rushes out expecting huge savings on everything they buy. The level of demand seems to reach ludicrous levels, and one would expect smart merchants to react by ...
JSideris's user avatar
  • 497
24 votes
3 answers
930 views

When Optimal Control fails (?)

In order to "ask my question", I have to solve a model first. I will omit some steps but still, this will unavoidably make this post very long -so this is also a test to see whether this community ...
Alecos Papadopoulos's user avatar
23 votes
4 answers
2k views

What are Giffen Goods?

What exactly are Giffen goods and are they of purely theoretical interest or has there been empirical evidence of their existence?
Steve S's user avatar
  • 725
22 votes
4 answers
2k views

Has the Nash Equilibrium led to any significant economic discoveries?

The Nash Equilibrium provided a new look at certain economic problems and won the Nobel Memorial Prize in Economic Sciences in 1994. Since its creation, the Nash Equilibrium has been applied to "...
Mathematician's user avatar
22 votes
4 answers
9k views

Why is bartering uncommon in modern countries?

Recently, I witnessed two acquaintances of mine engaging in bartering, where one traded his services for the services of the other. Both services had about the same value. By trading them directly, ...
Bart's user avatar
  • 323
22 votes
6 answers
2k views

Who exactly foots the bill if Greece defaults

Apologies if the topic is not appropriate (economics newbie here) but I am curious as to who exactly would foot the bill if Greece defaults on the ~300 billion dollars it owes. It looks like most of ...
stali's user avatar
  • 321

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