All Questions
14,973
questions
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 ...
- 321
22
votes
3
answers
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 ...
- 447
22
votes
6
answers
7k
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 ...
- 2,868
22
votes
2
answers
5k
views
Does diversity lead to more productivity?
Is it true that "Companies with diverse workforces outperform those with homogenous teams"? That's what TrendsWatching says anyway. And is it "diverse workforce" or "workforce ...
- 1,187
21
votes
7
answers
20k
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 ...
user14198
21
votes
5
answers
5k
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 ...
- 321
21
votes
4
answers
6k
views
Why would a company sabotage its product's ability to be used for a particular purpose?
I saw in the news recently that NVIDIA has placed limits on the hash rate for mining Ethereum cryptocurrency. This is purportedly to get more GPUs into the hands of gamers instead of crypto miners.
...
- 377
21
votes
3
answers
2k
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 ...
- 16.8k
21
votes
1
answer
19k
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?...
- 342
20
votes
8
answers
30k
views
Most common programs used by Economists
I recently asked a professor if he was planning on hiring a research assistant for next semester. I thought I'd be a pretty good candidate since I have decent experience using STATA, SAS, SPSS, R ...
20
votes
5
answers
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 ...
- 9,325
20
votes
6
answers
735
views
Experiments contradicting the expected utility model
This is a question I asked on the cognitive science beta which never got any answer there. I do not know what the policy should be for question migration/reposting (maybe worth discussing in the meta?)...
- 5,187
20
votes
5
answers
5k
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 ...
- 303
20
votes
0
answers
665
views
How do I use the Malliavin calculus to solve for the optimal trading strategy in the classic Merton problem?
How do I use the Malliavin calculus to solve for the optimal trading strategy in the classic Merton problem?
In Duffie's book "Dynamic Asset Pricing," he outlines the "Martingale method" of solving ...
- 9,325
19
votes
5
answers
8k
views
Why do many occupations show a gender bias?
Yesterday we had a question about the alleged underpayment of women in work, asking why employers would hire fewer cheaper female workers and would instead hire a larger number of expensive male ...
- 626
19
votes
5
answers
9k
views
If Bitcoin becomes a globally accepted store of value, would it be liable to the same problems that mired the gold standard?
I am reading this article here that explains why bitcoin is a better store of value than gold.
In sum, here are some of the reasons proposed:
If someday a "bitcoin standard" does come to ...
- 309
19
votes
6
answers
5k
views
What is the likely result of rent control in Berlin?
What predictions does economics make about the likely result of this policy in Berlin of capping rent prices.
Berlin is freezing the rents of 1.5 million apartments for the next five years starting ...
- 1,101
19
votes
5
answers
3k
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 ...
- 16.8k
19
votes
3
answers
775
views
If I don't pay a debt, then the creditor takes my goods. Why, then, do Greek creditors not take Greece?
Normally, when you don't pay a debt, your creditors take your goods (house, car, etc).
If Greece cannot pay its debt, can its creditors take Greek goods (structures, cities, industries, lands, etc)? ...
- 293
19
votes
4
answers
1k
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. ...
- 714
19
votes
5
answers
5k
views
How do economies grow?
These days, we hear again and again about the so-called "need" for economic growth. But how do countries actually grow economically? That is, why/how does their GDP increase over time?
...
- 10.6k
18
votes
5
answers
6k
views
How does everyone not become poor over time?
Look at the whole world --the union of all goods and services and workers and customers. Everyone who is a customer is a worker somewhere (they had to get the money to be a customer somehow). But not ...
- 331
18
votes
2
answers
5k
views
The efficacy of death penalty in reducing violent crimes
Common sense says that the provision of death penalty would make it costlier for people to commit crimes like murder or rape, thus reducing the expected payoffs and accordingly the occurrence of such ...
- 1,716
18
votes
2
answers
5k
views
Supermarket selling seasonal items below cost?
In a British supermarket, I saw the prices of Christmas chocolate gift boxes being cut dramatically (£1.50 to £0.15, and £7.50 to £0.22). I don't quite understand this behaviour, where the chocolate ...
- 283
18
votes
3
answers
5k
views
Why do wages not equalize across space?
In standard economic theory wages are simply prices on the labor market determined in equilibrium by the supply and demand of labor. Looking across space within countries it is however standard to ...
- 3,256
18
votes
2
answers
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 ...
- 183
18
votes
3
answers
992
views
Destroying the dollar
Let's destroy the USD dollar: I am the government of a small, economically and geopolitically unimportant country that has its own currency and a local central bank. I order the local central bank (at ...
- 33.1k
18
votes
2
answers
917
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 ...
- 9,325
18
votes
3
answers
6k
views
What does Yanis Varoufakis mean by "surplus recycling mechanism"?
Yanis Varoufakis, the current finance minister of Greece, talks about a "surplus recycling mechanism", a term he coined and uses to describe (as I understand it) a relief valve for economies running a ...
- 283
18
votes
2
answers
582
views
How accurate is duality?
In economic theory we know that with the use of some calculus, Hotellings Lemma and Sheppards lemma we can derive a given firms supply function and in term its Profit function.
With data of a given ...
- 8,034
17
votes
4
answers
14k
views
Why can't a country print its own money to spend it only abroad?
If a country prints money and distributes it between the people, it causes inflation. But what if a country prints its own money to spend ONLY abroad, which would allow a country to buy whatever it ...
- 273
17
votes
10
answers
12k
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 (...
- 1,728
17
votes
4
answers
993
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?
- 187
17
votes
5
answers
13k
views
Visualization tools for game theory: Decision trees
There are many ways to draw a sequential game 'by hand'. By drawing the game I mean this:
Displaying players' decision points, available actions and payoffs.
Is there any way I can do this in R or a ...
- 28.1k
17
votes
2
answers
6k
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 ...
- 9,325
17
votes
4
answers
6k
views
Why is fractional reserve banking allowed?
I learned about banks' fractional reserves and that revolted me. How is that not considered to be fraud?
The idea doesn't seem too sophisticated, on the contrary, it sounds very simple: the bank ...
- 303
17
votes
2
answers
24k
views
Lexicographic preference relation cannot be represented by a utility function
I am stuck on the following exercise, related to preference relations and von-Neumann-Morgenstern utility function.
A farmer wants to dig a well in a square field $[0,1000]\times[0,1000]$. The ...
- 2,983
17
votes
3
answers
1k
views
Complete Markets in Continuous Time
In the standard discrete time economies with a finite number of states, $n$, a complete markets economy is simply an economy with $n$ independent assets (Think Ljunqvist and Sargent Chapter 8). This ...
- 1,603
17
votes
5
answers
2k
views
Implications of abolishing Fractional Reserve Banking on mortgages and interest rates
Suppose for a moment that someone with legislative power decides to abolish Fractional Reserve Banking and passes a law that forces banks to only lend the money they own, that is M0.
What would be the ...
- 371
17
votes
5
answers
6k
views
When a stock market crashes, how does money just disappear?
I looked it up online (here), but I find it hard to believe that money literally "disappears". For example, if I buy 10 stocks of a toaster company for \$100 per share, and then the stock value drops ...
- 171
17
votes
6
answers
12k
views
Productivity vs real earnings in the US -- what happened ca 1974?
Somewhat related to the most recent US elections, I've been researching the whole "white working class" situation, and one strange anomaly has popped up.
When one looks at a graph of productivity (...
- 346
17
votes
5
answers
910
views
Has an increase in housing supply in popular cities including Amsterdam led to an increase in house prices?
Common economic thinking dictates that an increase in price should lead to an increase in supply, and that an increase in supply should then lead to a decrease in price. According to Maarten van ...
- 1,734
16
votes
11
answers
6k
views
Is money we make completely taken away by taxes?
In my opinion, any money we make will be completely taken away by taxes. Here is my logic.
When I earn some money (x), I have to give some as tax to the government. ...
- 195
16
votes
6
answers
4k
views
Why aren't we seeing carbon taxes in practice?
(See also a version of this question under politics, https://politics.stackexchange.com/questions/48764/why-arent-we-seeing-carbon-taxes-in-practice)
It seems that there are many advantages to carbon ...
- 305
16
votes
4
answers
7k
views
Is Malthusian theory of population growth being realized?
You probably are familiar with Malthus' Theory of Population Growth.
If you are not, Malthusian model has the following mathematically form:
$$P(t) = P_0e^{rt}$$
A basic graphic representation is:
...
- 307
16
votes
4
answers
2k
views
Use of mathematics and imprecise definition of terms
As a postgraduate student of economics I've been trying to expand my mathematical "toolset". While doing so I've talked to engineers, physicists and mathematicians, many of which have ...
- 850
16
votes
5
answers
5k
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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 ...
user218
16
votes
4
answers
1k
views
Most notable papers in Economics in 2021
This question is based on this one in Math Overflow
I understand that I can't simply 'translate' the question into the area of economics. Thus, I'm open to improvements on the question framework.
Here'...
- 5,051
16
votes
1
answer
3k
views
Are democracies more economically productive than autocracies?
The book The Dictator's Handbook claims in several places that democracies are more productive than autocracies. It's central to their argument of lower taxation rate in democracies giving more wealth ...
- 263
16
votes
1
answer
13k
views
How does one derive the elasticity of substitution?
For two goods $x$ and $y$, the elasticity of substitution is defined as $$\sigma \equiv \frac{d\log\left(\frac{y}{x}\right)}{ d\log\left(\frac{U_x}{U_y}\right) }= \frac{\frac{d\left(\frac{y}{x}\right)}...
- 3,454