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32 votes

Did real incomes drop significantly since the 1950s?

Most of the US real earnings data which go only as far as mid 60s. According to the statista data presented in this article by world economic forum the evolution of real hourly earnings in the US for ...
1muflon1's user avatar
  • 57k
22 votes

Did real incomes drop significantly since the 1950s?

Average standard of living is massively higher today compared to the 1950s, primarly due to technological progress. Even a cheap low end car today is much better than the big cars of the 1950s, it is ...
quarague's user avatar
  • 882
15 votes

Did real incomes drop significantly since the 1950s?

The book “The Two Income Trap” (2003) by Elizabeth Warren (recent Democratic presidential candidate) and Amelia Warren Tyagi discussed this. They looked at spending breakdowns in the 1970s and when ...
Brian Romanchuk's user avatar
13 votes

How could the economic cost of the world not speaking the same language be estimated?

To measure the costs of different people speaking different languages, researchers use a "linguistic distance" metric, see for example this paper. However, measuring the cost of linguistic diversity ...
emeryville's user avatar
  • 6,975
7 votes

Applications of Optimal Transport in Economics

Optimal transport methods are very much still in use in economics. The show up in two-sided matching with side-payments, contract theory, hedonic pricing, partial identification in econometrics, and a ...
Michael Greinecker's user avatar
6 votes
Accepted

Why could interest rates go up if Brexit happens?

What would happen in the event of a "Leave" vote in the referendum? Well, the pound would quickly fall in value against its major trading partners - and some falls have already happened as the "Leave" ...
410 gone's user avatar
  • 8,168
6 votes

Did capitalism exist before the 18th century?

According to some yes. In this (historically oriented) view, whatever succeeded feudalism is called capitalism. Capitalism, broadly accepted as a phase of history, is dominating the last half-a-...
got trolled too much this week's user avatar
5 votes

How wealthy are modern day humans compared to preindustrial times?

There is significant debate about whether such x exists. For example Louis XIV had things in his estate that are not in mine (I do not have two palaces). But there are also things in my estate that ...
Giskard's user avatar
  • 29.3k
5 votes

When and why women left the labour market?

They worked at home. Like "Household Engineers" do today, doing everything working from down to dusk like their husbands, and like their husband they shared in the earnings of the household. Until the ...
marli's user avatar
  • 51
5 votes
Accepted

Are simultaneous equation models out of fashion? Why?

I think this is already answered in the paper itself and in addition I think this is due to the way how they define 'simultaneous equations' topics. First as authors of that paper opine: This ...
1muflon1's user avatar
  • 57k
5 votes
Accepted

Why is having a big corporation keep its money in foreign countries a bad thing in the public's eye?

Firms can always shift their profits from one tax territory to another via various methods. Consider a simplistic example, let’s say we have firm ABC that has most of its business in Sweden. The ...
1muflon1's user avatar
  • 57k
4 votes

How wealthy are modern day humans compared to preindustrial times?

As others noted, these kinds of things are extremely difficult to calculate because we don't have good data going back much further than the start of the 20th century and because it is hard to make a ...
Ubiquitous's user avatar
4 votes

How wealthy are modern day humans compared to preindustrial times?

For comparison with mainly agrarian pre-industrial societies, it is possible to derive estimates of X from figures in the Maddison Project Database, which contains estimates of real per capita GDP at ...
Adam Bailey's user avatar
  • 8,529
4 votes

Why is capital income taxed differently than wage income?

There are two main reason for the difference in tax rates that I see from the literature. First, some papers argue that the optimal tax rate on capital is zero. This is the famous "Chamley-Judd" ...
BB King's user avatar
  • 6,238
4 votes

Why could interest rates go up if Brexit happens?

Just to come back on your two questions: (i) whenever the market is getting "tense", interest rates go up. Because people usually sell their bonds, and so interests rates go up as these two are ...
Alexis L.'s user avatar
  • 593
4 votes
Accepted

Was the aid in the Marshall Plan a loan?

The plan did involve loans but was mostly in the form of grants (gifts). As the Wikipedia entry states: The Marshall Plan [...] consisted of aid both in the form of grants and in the form of loans. ...
luchonacho's user avatar
  • 8,591
4 votes
Accepted

Did the idea of “making money” originate in the United States?

No, the idea of wealth as something to be created did not originate in the United States. It was part of the mercantilist approach to national economic policy that was widely adopted in Europe in the ...
Adam Bailey's user avatar
  • 8,529
4 votes
Accepted

Who created the concept of "present value"?

It has been argued that the concept of present value was implicit in Liber Abaci (1202) by Leonardo of Pisa (also known as Fibonacci). This paper by Goetzmann makes this claim in its abstract and ...
Adam Bailey's user avatar
  • 8,529
4 votes

Predicted recessions that never happened

One example is this UK Government analysis: "Britain’s economy would be tipped into a year-long recession, with at least 500,000 jobs lost and GDP around 3.6% lower, following a vote to leave the ...
Ubiquitous's user avatar
4 votes

Applications of Optimal Transport in Economics

I am very (very) much not familiar with optimal transport, but there are applications in mechanism design. For example, Daskalakis, Deckelbaum & Tzamos (ECTA 2017, "Strong Duality for a ...
Bayesian's user avatar
  • 5,291
3 votes

What are modern examples of established economic theories being used on a large scale in real life?

Spectrum auctions are generally designed by economists using results and insights from auction theory. For example, most modern spectrum auctions are at least somewhat related to the ascending clock ...
Ubiquitous's user avatar
3 votes

What was economics like as a field before Adam Smith, the father of *modern* economics?

Legendary Indian diplomat of Mauryan era, Kautilya (or Chanakya or Vishnugupt), is Indian equivalent of Adam Smith. It is estimated that he wrote his classic book Arthshastra (literal meaning: ...
Madhur's user avatar
  • 61
3 votes
Accepted

Is money capital?

Knut Wicksell, author of Interest & Prices, argues that money ≠ capital:(quoted on p. 8 of Bernard W. Dempsey's Interest & Usury) It is usually said that in modern communities, capital (of ...
Geremia's user avatar
  • 471
3 votes

Is there a study of world poverty rates over time pre 1800?

This is only for Europe unfortunately, but Bob Allen has a famous paper in which he presents reconstructed data for real wages in different European cities from 1350 all the way to 1799: Allen, ...
Martin Van der Linden's user avatar
3 votes

When was fractional reserve banking introduced?

The argument of W.V. Harris is that it goes back at least to Roman times. For example, the bankers of Ephesus were given 10 years to pay back loans in 85 bc, an action that makes little sense outside ...
Brian Romanchuk's user avatar
3 votes

When was fractional reserve banking introduced?

Fractional reserves banking is at least as old as the 1400's: A balance sheet from the London branch of the Medici Bank, dated November 12, 1477, shows that a significant number of the bank’s ...
BKay's user avatar
  • 16.3k
3 votes
Accepted

Who was the inventor of Utility function?

Not to be too obvious about it, but couldn't you just say Jeremy Bentham? The calculus of choosing bundles that maximizes pleasure specified a very simple utility function in words.
bdempe's user avatar
  • 308
3 votes
Accepted

Who took utimatum game and dictator game as the evidence against Homo Economicus assumption of individual utility maximization?

Utility maximization is a proposition that can neither be confirmed nor refuted. For one thing, "utility" does not even exist as an entity; it's a mere conceptual construct. For another, "maximization"...
Herr K.'s user avatar
  • 15.5k
3 votes
Accepted

why did the 2008 financial crisis happen inspite of banks having 85% insurance on deposits in U.S.?

Yes, most of the loans were insured - this is called a credit default swap (CDS) that an insurance company insures a bank loan in case of a default (i.e. when a borrower cannot repay, the insurer pays ...
user84681's user avatar

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