24
votes
Understanding the "But they will lose jobs!" argument
if they were to go out of business, there'd be more unemployment and people in economic troubles in total
Not necessarily. Customers are paying money for the ill-gotten services of company X. This ...
- 8,311
22
votes
Accepted
Are democracies more economically productive than autocracies?
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 ...
- 54.4k
15
votes
Understanding the "But they will lose jobs!" argument
As stated, a pest control company that sends pests into people's homes to then offer to get rid of them, is essentially a rephrased version of the parable of the broken window: https://en.wikipedia....
- 251
8
votes
Accepted
Why do all countries recognize foreign wealth?
Countries do not just stop recognizing foreign wealth because there are two kinds of wealth: real assets, and claims on the production of others; the values of both of these types of wealth are not ...
- 6,374
8
votes
Accepted
Is climate change an economic question?
Climate change in itself, its measurement and the fact that it is happening, and modeling its speed or trying to discover its causes (e.g., carbon emissions, methane emissions and so on) is not an ...
- 54.4k
8
votes
Why land supply is inelastic?
The claim is that this curve should be a vertical line because no more land can be produced. However, as far as I understand, the supply curve represents the quantity of a product that sellers are ...
- 54.4k
8
votes
Accepted
What are the reasons for Russian Ruble to strengthen in the past few days?
It’s likely combination of several factors.
Some of it it’s because Russia has instituted capital controls (see Reuters). That means that Russians are limited or in some cases even prevented from ...
- 54.4k
8
votes
Understanding the "But they will lose jobs!" argument
You're correct that there is wastage in this setup. Let's consider the pest control company X. If the company generates revenue of $M from its services, that revenue is distributed among its workers ...
- 8,206
5
votes
Why is Mises "permitted" to define "Economics is an a priori science", if a priori is not trustworthy?
Although I disagree with von Mises, he was reacting to what he saw as a very real problem, which was the use of relatively primitive statistical methods to describe behavior. In fact, Leonard Jimmie ...
- 2,006
5
votes
Accepted
"Tightness" of political elections and public attention
Yes, you should look at the regression discontinuity literature in political economy that uses close elections as the identification strategy. For example, see http://sekhon.berkeley.edu/papers/...
- 198
5
votes
Accepted
Is utility in neoclassical economics a circular argument/concept?
Let's be clear--the concept of utility is both unfalsifiable (as a singular proposition) and useful.
Joan Robinson is right, of course: Utility as a definition is circular. If you read a textbook ...
- 66
5
votes
Understanding the "But they will lose jobs!" argument
I am arguing with another person about such a company X, and say that X is bad for the economy since it will deplete the money of average person simply. The person I am arguing with say that, if they ...
- 54.4k
4
votes
Quantitative Marxian/Marxist micro and macro economic models?
There is a very interesting paper by John Roemer, published in Econometrica in 1980, that presents a mathematical general equilibrium Marxian model. I am not sure someone have ever estimated it though....
- 8,581
4
votes
Quantitative Marxian/Marxist micro and macro economic models?
One (perhaps flippant) answer is that Marxists have a lot of ideas about how prices "should" work or how the value of labor "should" be rewarded, that aren't in line with what we observe, because ...
- 6,578
4
votes
What does liberal economic theory say about monopolies?
Monopoly and competition are one of the central topics in microeconomics, so there many theories on the source of monopoly, and they are not universally applicable. Government intervention is ...
- 230
4
votes
What would happen if a country defaulted on its public debt?
A “full explanation” would be extremely long; depending on the situation, a great many things would happen.
For developing countries, defaults are typically on debt in foreign currency, issued under ...
- 9,852
4
votes
Accepted
Country specific economic recession/financial crisis data?
Several articles use data sets on this issue but I am not sure that all the data sets are freely available.
Valencia & Laeven (2012) use the IMF country reports to create their data set. It ...
- 1,278
4
votes
Accepted
What does 'Health spending as a share of GDP' mean?
Healthcare spending as a percentage of GDP is the measure of spending relative to the value of entire nations output at market prices in a given year. I suppose you can call the total output the value ...
- 54.4k
4
votes
Accepted
Is Keynesian economic theory still considered capitalism?
Capitalism is not well-defined in economics. In most economic textbooks the word capitalism is not even printed.
However, according to dictionary (Merriam-Webster) definition:
an economic system ...
- 54.4k
4
votes
Accepted
How did Pareto came up with Pareto Distribution of wealth law?
The Pareto distribution was derived based on the observation of Vilfredo Pareto that in Italy $80\%$ share of land belonged to $20\%$ of the country’s population, and he showed this held for many ...
- 54.4k
4
votes
Accepted
Why does Game Theory seem to ignore the impact that collectively altering a player's possible strategies can have on their utility?
A basic assumption of game theory is that strategy choices lead to outcomes and players have preferences over outcomes only. If players in a given strategic choice situation are known to also have ...
- 6,540
4
votes
Understanding the "But they will lose jobs!" argument
This resembles Keynes' suggestion to use public funds to let people dig holes to counteract a depression if nothing better can be found. Of course it would be much preferred to let people do something ...
3
votes
How does one asses the impact of a proposed policy?
Being an economist, I'd say that carrying out a quantitative forecast ("the policy will create/cost x jobs") would require setting up a model, feeding appropriate data and applying appropriate ...
- 1,307
3
votes
Accepted
How long into the past can we trace the effect of institutions?
Institutions are likely having a permanent effects as they create path dependency which implies that even temporary shocks would have permanent effect. At least that is what is argued by many ...
- 54.4k
3
votes
Accepted
Will economic discrepancy between democratic and authoritarian states decrease over time?
As you point out, going by the typical doctrine of extractive institutions from Why Nations Fail (Acemoglu), we have this basic framework:
Disenfranchisement of private sector leads to capital flight ...
- 1,103
2
votes
What is the loss of productivity of not using the international system of measurments (SI)
This is a good example of "transactional costs" -and of the small "menu costs" as Mankiw has once called them. His paper Mankiw (1985) "Small Menu Costs and Large Business Cycles: A Macroeconomic ...
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2
votes
Are state owned enterprises really inefficient?
In contract theory, economists such as Oliver Hart have argued that ownership of a firm would not matter if complete contracts could be written. For example, the incentives to reduce costs that the ...
- 21
2
votes
Why politicians choose Mega Projects in developing countries?
You are looking for the political economy literature on government expenditures. That is a massive literature. A starting point may be given here.
A summary of all possible reasons for so-called ...
- 1,852
2
votes
Formula for feasibility for production versus import
Really, when considering whether importing a good is beneficial to a country we need only look at comparative advantage. For this concept however, we need information on another good which could be ...
- 1,558
2
votes
Accepted
In what way specifically are US CEO's able to engage in rent-seeking and exploit corporate governance to increase compensation?
Pre-Sarbanes-Oxley it was common for CEOs to nominate the members of the board of directors of their firms. A sub-committee of the board would determine the CEO's compensation, so a CEO could choose ...
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