# Tag Info

72

There could be several reasons here are just few: Principal-agent problems. Firms are typically not managed by their owners but by managers (agents) who act on the behalf of owners/shareholders (principals). While, owners might desire to maximize profits agents can to some degree act to pursue their own goals (see discussion in Hendrikse Economics and ...

35

Quite simple. If women are paid less, then that's because people believe their work to be worth less. The same believe, that womens work is worth less, then stops employers from hiring more women. (Please note that I don't endorse this view. It is, however, the most simple explanation inside of the assumptions made by the question. Also, as a plus, this ...

32

Rational Markets If markets were perfectly rational, then black women would have a near 0 unemployment rate, because they are cheapest workers in the economy, meaning that they are more strongly underpaid for the same skills, experience, and occupation than virtually every other class of worker. In point of fact, black unemployment is much higher than ...

31

I should say pre-emptively that I'm not satisfied with ideas that merely may explain the effect, as yesterday's question produced a proliferation of rationalisations and claims that lacked rigour. I'd prefer to see an explanation that attempts to be comprehensive, or supports contentious claims (such as those about women's productivity) with research. Your ...

27

Because women are not paid less for the same work when all the variables are taken into equasion. Caveat: below answer is a nearly verbatim copy of my earlier answer on Politics.SE on the topic In short, the much-cited "77 cents" figure is from the "lies, big lies, and statistics" department of political propaganda. The real unexplained ...

21

In economics, it is accepted that countries with good 'inclusive' institutions, such as strong property rights, are more productive and able to develop faster (or even develop at all) than countries with bad 'extractive' institutions, such as forced labor (see Acemoglu 2008, Acemoglu & Robinson 2000a, 2000b, 2001, 2006, 2008; Olson 1984, Bates 1981, 1983,...

18

I'm hesitant whether to write this as an answer or as a comment for why this question should be closed as off-topic, since the reasons likely have little to do with economics. Since you did specifically ask about economic reasons, though, I'll attempt an answer. The economic part of your question is: What are the economic reasons why, when encountering low ...

11

Balance sheets always balance, so assets equal liabilities. Imagine a commercial bank goes to the central bank and wants cash. The central bank provides the cash, but asks for some of the commercial bank's loans (or government bonds) in return. The central bank now has the loans (or government bonds) as assets and the cash as liabilities. The cash is a ...

11

I must preface that the original question as it stands is way too broad. It probably needs to be cut down into smaller parts, but that's hard to know how to do if you are a layperson. This question really is an enormous one, and although there are a lot of answers that give bits and pieces of info, because the question is so broad, there are going to be lots ...

11

The question of whether Economics is a science has no straightforward answer simply because the question "what is Science" has no straightforward answer either. This question is referred to as the "demarcation problem" (related to "boundary work/ problem") in the Philosophy of Science and is still an unsettled question in the ...

10

Your coins do not have 0 inflation in the long run First, we need to set straight that you have a critical error in your supposition: The rate of creation of money is not the only determinant of the inflation rate, see here. Even if we ignore these equilibrium effects, is any of these coins superior in its rate of money creation? Suppose hereinafter that ...

10

This is an interesting question, and I don't have a good answer. Just pointing out about the second part that the canonical labour market model of Diamond-Mortensen-Pissarides views a labour market contract in terms of matching, when a surplus is shared between employer and employee through a nash bargaining mechanism. So, earning less does not necessarily ...

8

It has been shown numerous times that the apparent pay gap is largely due to women having to work part time or take time off for maternity leave, and that the gap is correspondingly in a narrow age range (I believe mid 20's +/- a few years). However, the statistic is often spun by computing hourly rates and averaging everybody together, and "women make ...

8

There have been several good answers that tackle the economic reasons already; but let me take a different approach. More or less the same approach of INNONOTING, but he got downvoted probably because he didn't really back up his claims. It is often said that occupations have a gender bias because men and women are raised to fit a certain role-pattern and ...

8

Suppose you write some software that you can then freely sell at practically no cost per unit (the wonders of the internet). You want to make as much profit as possible. Since you have almost no per unit cost, maximizing your profit will amount to maximizing the revenue, the price per unit times the number of units sold. Note what did not enter the ...

7

This is a very good question and I agree with the answer about the 'wage gap'. Education is a point that I want to add here. A survey was recently conducted in the construction labour market in China. Women have relatively low hourly salary than men. We may think this's because women are not able to carry heavy materials. On the contrary, the majority of the ...

7

Slate Star Codex has a long, well researched article. TL DR: It is very likely that women as a group have more members who care about persons / living things and men as a group have more members who prefer things / concepts. There is a strong correlation between prenatal testosterone and interested in things. Women with a high prenatal testosterone ...

6

This is an interesting question. The banks themselves will not naturally divide themselves. There are great returns to scale in banking, and risk can be greatly diversified by being massive and having more clients in different positions. This means they would have to be broken up legally. So, one would need legal cause to break them up, of which at the ...

6

TL;DR: Economics is not politics by definition. Whether economics is science depends on what view on demarcation of science you adopt but most of the economics will pass virtually any commonly used criteria in philosophy of science and there is no doubt it passes the mainstream demarcations such as the Popperian one. Economics is: The most common definition ...

5

As you learn more about economics you should gradually come to distinguish the vocabulary of economics from that of politics (which is also not the same as political science). When politicians or political activists speak, they use a variety of terms that are very vaguely defined, and sometimes outright derogatory. They are not actually meant to convey exact ...

5

Weak stationarity and weak dependence are complementary conditions. A weakly stationary time series $y_t$ has an underlying statistical process which is time-invariant. This is characterised by three conditions: $$E(y_t)= \mu$$ $$E((y_t-\mu)^2)=\sigma^2 <\infty$$ $$Cov(y_t,y_{t+s})=Cov(y_t,y_{t-s})$$ Condition (1) indicates that a weakly stationary ...

5

The argument is that the monopolist's decision is based on the demand curve (in effect matching marginal total revenue to marginal cost) so is not independent of the demand curve, and in that sense there is not a corresponding supply curve with price and quantity in equilibrium where the two curves cross; the monopolist equilibrium point is likely to be at a ...

5

A "fixed fraction" doesn't mean an "equal fraction", or at least that's not the intended meaning. It can be easily verified that the solution to $$\max_{x_1,x_2}\;x_1^{a_1}x_2^{a_2}\qquad\text{s.t.}\; \pi_1x_1+\pi_2x_2\le w$$ is x_1^*=\frac{a_1}{a_1+a_2}\frac{w}{\pi_1}\quad\text{and}\quad x_2^*=...

5

Your final line This figure is only for representation. pretty much answers your question. When explaining these concepts you want to draw something that is easy to understand, i.e. does not have too many irregularities but is also not too regular. Linearity is a special attribute of functions. General curves show that there is usually no need for this ...

4

There are not a lot of studies on this topic. There were studies in the 70s that would tend to disconfirm the idea of technical analysis as it was proposed at the time. The studies generated random sequences of numbers in a time series and had technical analysts then make decisions believing that the time series were real time series. They didn't detect ...

4

Correcting Misconceptions in the Question: Before providing an answer it is worth noting the premise in your question is simply incorrect. You state: I have heard that introducing capital gains taxes would create distortions in investments, and that the optimal tax rate for capital gains is actually 0. But this is not rationale for the famous 0 capital ...

3

Yes they do in in a several ways. The main ones are: Trading (not just of the people who actively manage the EFT but generally) helps price discovery. Price discovery is an important role of stock market. It is socially beneficial for companies to be appropriately priced given their fundamentals and all other avaiable information as that helps divert ...

3

There are several reason for that. First, issue here is that you are talking about high inflation. Most economists are in favor of small inflation (around 2% per year for reasons you can read about in this and this old Economics.SE answers). Second, inflation does not generally have the beneficial properties you ascribe to it. Inflation can stimulate output ...

3

Indeed the debt tax shield is distorting. Any policy that will essentially distort prices to favor A over B will lead to too much A and too little B. So such differentials are (almost) always distorting (unless you actually want less B and more A due to externalities). Here the tax deductibility makes debt cheaper compared to equity. We know this is ...

3

I don't know if Amazon breaks out downloads such as Kindle or movies from the non-AWS part of income statement. You might look at the annual filing to see if there is a breakdown. You are interested in "retail". If we take "retail" to mean non-AWS then we can use the table I posted. It looks like in 9 recent months retail made 5.7B USD in ...

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