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98
votes
16answers
18k 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 ...
65
votes
13answers
16k 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 ...
62
votes
17answers
14k 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 ...
56
votes
22answers
11k 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 ...
55
votes
7answers
10k 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 ...
55
votes
4answers
12k 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 ...
39
votes
1answer
22k 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 ...
36
votes
7answers
3k 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 '...
35
votes
11answers
7k 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 ...
34
votes
2answers
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 ...
31
votes
9answers
866 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 (...
29
votes
10answers
15k 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 ...
29
votes
6answers
2k 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, ...
28
votes
6answers
10k 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 ...
27
votes
3answers
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?
26
votes
1answer
423 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 ...
25
votes
10answers
11k 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 ...
25
votes
6answers
3k 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 ...
25
votes
4answers
2k 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?
25
votes
3answers
7k 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? ...
24
votes
4answers
8k 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, ...
23
votes
5answers
7k 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 ...
23
votes
6answers
1k 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 ...
23
votes
4answers
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?
22
votes
4answers
4k 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 ...
22
votes
4answers
71k 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 ...
22
votes
6answers
3k views

How do Marxist economists solve the Diamond-Water Paradox?

For class surveying different economic systems, I read a book on Marxism and its core beliefs. As I read, I came to learn that the Marxist view of economics depends heavily on the Labor Theory of ...
21
votes
7answers
9k 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 ...
21
votes
3answers
3k views

Why is collective bargaining by a group of employees not the same thing as price-fixing?

Employees sell their labor for wages. If a critical mass of employees get together and demand higher wages, how is this not the same thing as a critical mass of merchants illegally fixing the price of ...
21
votes
2answers
24k 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 ...
21
votes
3answers
1k views

In what sense are “new-Keynesian” models “new” and in what sense are they “Keynesian”?

Hopefully, the title of this question is quite descriptive. Whilst I have a broad understanding of the research agenda of macroeconomics, I don't have a very good picture of how it is divided into ...
21
votes
2answers
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 ...
20
votes
4answers
2k views

Has the Nash Equilibrium lead 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 it's creation, the Nash Equilibrium has been applied to "...
19
votes
7answers
13k views

Why do different countries have different currency?

Why do different countries have different currency? I have this question because I want to know why to divide it? If it's not divided then we can easily use the money anywhere and we won't need to ...
19
votes
5answers
2k views

Where to start learning economics as a mathematician?

I study pure mathematics at university and I'm looking to get into economics, with pretty much no background knowledge about it. Are there good sources to learn from with a decent mathematical ...
19
votes
8answers
13k 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,...
18
votes
2answers
4k views

Is the Occupy Wall Street famous 1% stable?

Occupy Wall Street has a famous slogan "we are the 99%", refering to the "fact" that 1% of the people in the US take nearly the quarter of the national income. However, this does not seem to consider ...
18
votes
5answers
2k views

Why are real median household incomes stagnant?

This image shows US real median household income. It seems remarkable for its lack of growth over the last 20 years. This has been the subject of much political debate (around the "1%" and "occupy ...
18
votes
3answers
76k 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 ...
18
votes
4answers
873 views

Is net neutrality not important in a competitive market of internet providers?

In my understanding, allowing ISP to throttle sites that use a lot of traffic is just price discrimination. The ISP will charge sites like Netflix, which will then pass the cost to Netflix consumers. ...
18
votes
2answers
743 views

Why is capital income taxed differently than wage income?

Why is income from capital gains taxed differently than wage income? There are perhaps historical, practical, and theoretical reasons. What are they? (As far as historical reason go, I'm asking ...
17
votes
9answers
10k views

Car prices haven't changed in 20 years, no inflation?

I notice that there seems to be little or no change in car prices over the last 20 years and they seem to be unaffected by inflation. For example, a Toyota Camry sold for about \$23,000 +/- \$2,000 (...
17
votes
5answers
2k views

Unemployment and the Minimum Wage---what are the main counter-arguments to Card and Krueger?

Card and Krueger's paper (AER 1994, "Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania") uses a difference-in-difference identification strategy to ...
17
votes
5answers
4k views

Can inflation occur in a positive-sum game currency system such as the Stack Exchange reputation system?

As most active users of this site know, the way the reputation system works is that everyone starts out with 1 reputation and a user can earn more reputation by asking good questions and writing ...
17
votes
4answers
703 views

I lost $100 in the laundry, who won?

I lost a 100 dollars bill in the laundry (it was destroyed). I clearly lost 100 dollars. Where are they now? Who won 100 dollars?
17
votes
1answer
14k views

What do supply-demand curves really look like?

In my basic high school economics course, we've always used supply-demand curves that are lines to simplify calculations. In real markets for real goods, what do the supply and demand curves look like?...
16
votes
6answers
10k views

Why is the Free Rider Problem a problem?

Why is it bad that someone can use something like a park or an emergency room without paying?
16
votes
5answers
3k views

Topological concepts in economic theory

QUESTION: What are the major or systematic applications of post-1960s mathematics to microeconomics? For example, in the late 19th century, Fisher first used the mathematical ideas of Gibbs to ...
16
votes
6answers
507 views

Experiments contradicting the expected utility model

This is a question I asked on the cognitive science beta, but which never got any answer. I do not know what the policy should be for question migration/reposting (maybe worth discussing in the meta?),...
16
votes
2answers
4k views

What is the importance of Epstein-Zin preferences?

I've heard that there is a lot of work being done recently that applies Epstein-Zin preferences. The Wikipedia page doesn't seem to be very full. Why are Epstein-Zin preferences important? How does ...

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