45 votes

What are some results in Economics that are both a consensus and far from common sense?

Most theorems in economics would satisfy the consensus requirement. However, depending on what you consider to be common sense, different results will qualify. The following are two results that I ...
39 votes

The efficacy of death penalty in reducing violent crimes

The literature on this issue flip flops. The first seminal study by Sellin (1959)¹ did not find any significant effect, but early literature was riddled with methodological errors. Ehrlich’s (1975)² ...
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  • 1,425
29 votes

Are there any non-paywalled reputable economics journals?

Theoretical Economics (TE) and Quantitative Economics are two open access, peer reviewed journals. The former I know is of very good quality, arguably the top "field journal" in microeconomic theory.
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  • 14.6k
29 votes

What are some results in Economics that are both a consensus and far from common sense?

In an open economy, the balance of payments current account equals net saving. This is often represented as: $$S - I = X - M$$ where $S$ is saving, $I$ is investment, $X$ is exports and $M$ is ...
24 votes

What are some results in Economics that are both a consensus and far from common sense?

The Giffen Paradox - increasing prices can lead to higher demand even if the goods are considered inferior. General consensus is increasing prices lead to less demand - if it's more expensive, people ...
23 votes

What are some results in Economics that are both a consensus and far from common sense?

The fact that the burden of a tax on sellers can by borne by buyers, and vice versa. More generally, the fact that true tax incidence is largely or completely unrelated to who is nominally being taxed ...
21 votes
Accepted

Are there examples of state banks in history?

Yes. An important and currently highly relevant example is India. In 1969, the Government of India issued the Banking Companies (Acquisition and Transfer of Undertakings) Ordinance, 1969 which ...
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17 votes

Are there any non-paywalled reputable economics journals?

The American Economic Association's Journal of Economic Perspectives can be accessed free of charge. It is definitely a reputable outlet (articles are mainly solicited from top economists), although ...
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16 votes

Should I stay or should I quit?

Check out sunk cost. Although this might seem completely counterintuitive, the investment you have made should be irrelevant to your decision to stay or quit, if this investment has already been made ...
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  • 1,057
15 votes

What are some results in Economics that are both a consensus and far from common sense?

Best price clauses and, to a lesser extent, price-matching guarantees have been the subject of intense regulatory activity in recent years. Here's a fact that is surprising to many, despite there ...
14 votes
Accepted

Game theory for showing interest and availability when dating

Sending costly signals may work, at least when the recipient is less attractive than the sender. There's also a nice popular science book by Paul Oyer called Everything I Ever Needed to Know About ...
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  • 1,105
14 votes
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Quality of French wine in the US vs French wine in France

This is called the Alchian–Allen effect. The Alchian–Allen effect was described in 1964 by Armen Alchian and William R Allen in the book University Economics (now called Exchange and ...
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  • 15.9k
14 votes

How much do second-hand good purchases affect first-hand demand?

Coase (1972) has a classic treatments of this issue for monopolists selling durable goods. The general idea is that if Alice sells a textbook to Bob, Bob can resell it to Charlie when he is done with ...
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12 votes
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Should I stay or should I quit?

A relevant literature seems to be that on optimal stopping problems. There is a fairly technical Wikipedia article here and here's a book chapter. In economics, such models have been used to think ...
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  • 16.6k
12 votes

What are some results in Economics that are both a consensus and far from common sense?

I’m going to toss my hat into the ring with the very notion of Opportunity Cost Who hasn’t argued with someone who “likes” A, which has an opportunity cost B, and have that person adamantly refuse to ...
12 votes

What precisely is scarcity?

Your formula $\mu = \sum\limits_{i=0}^n x_i$ just denotes the total amount of goods, so this just means that $\mu$ units were distributed among $n+1$ agents. Scarcity (in this context) means that no ...
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11 votes

Book recommendations on empirical methods in economic research and econometrics?

Firstly, for basic introductory econometrics, the following is quite good: "Introduction to Econometrics" by Stock and Watson. It is light on technical details, and heavy on intuition. This might ...
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11 votes

Textbook for macroeconomics (advanced undergrad)

Advanced Macroeconomics by David Romer, now in its fourth edition. Link contains TOC and a sample chapter. The presentation consists of formal theory models, but with lots of intuition too, followed ...
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  • 1,105
11 votes
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Mathematical Micro/Macro Economics Textbook Recommendation

You should also try Advanced Microeconomic Theory (3rd Edition) by (Jehle, Reny, 2011). Note that, imho, Mas-colell-Whinston-Green (1995!) is the best choice for those with initial background in Math ...
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  • 626
11 votes
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Uses of convex analysis in Economics

A partial answer: convex analysis is extensively used in axiomatic decision theory, at least in its recent developments. Most of these papers focus on individual behavior. You can have a look for ...
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  • 3,202
11 votes

Are terrorists rational?

I guess you might already know this, but I wanted to add a little detail to the other answers for the sake of any layman who comes here and gets the wrong end of the stick. What is meant by ...
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  • 16.6k
11 votes

What are some results in Economics that are both a consensus and far from common sense?

Price discrimination can make consumers better-off This can happen in a variety of ways. For example, suppose that 50% of consumers are 'loyal' to firm A and 50% loyal to firm B. A consumer is ...
11 votes

Statistical models which represent the impact of strict measures vs no strict measures (and less economic impact), enforced due to Covid-19

"The Benefits and Costs of Using Social Distancing to Flatten the Curve for COVID-19", Thunstrom et al. We examine the net benefits of social distancing to slow the spread of COVID-19 in the United ...
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  • 3,728
11 votes

Are there examples of state banks in history?

In France a number of banks were nationalized after the 1939-1945 war. by the law of December 2, 1945. In short, that law first nationalized the Banque de France and gave it the monopolistic privilege ...
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11 votes
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Is Basic Economics by Thomas Sowell a good book for a layperson who isn't interested in pursuing economics?

I heard that Basic Economics by Thomas Sowell is a good book for a layperson to get a feel for how the economy works. I have also heard some criticisms but they seem to be based on Thomas Sowell's ...
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10 votes
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Applications/generalizations of a theorem of Debreu

This result is indeed a version of Berge's maximum theorem. If there is a continuous function $u:M\times H\to\mathbb{R}$ such that $x\preceq_e z$ if and only if $u(e,x)\leq u(e,z)$, one can derive the ...
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10 votes
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Book Recommendation for Microeconometrics of Discrete Data

Personally, for choice analysis, I like Discrete Choice Methods with Simulation by Ken Train (pdf) Applied Choice Analysis: A Primer by Hensher and Greene (2nd edition, book) Modeling Ordered Choices ...
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  • 1,105
10 votes
Accepted

Where to start learning economics as a mathematician?

McCloskey's Applied Theory of Price is somewhat legendary as a model of clarity. It is, sadly, no longer in print. However, a PDF is available here: http://www.deirdremccloskey.com/docs/price.pdf. The ...
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  • 16.6k
10 votes

What are some results in Economics that are both a consensus and far from common sense?

Lowering income tax rates can in some circumstances increase revenue. A simplistic view would assume higher taxes = higher revenue, but it doesn’t account for the fact that different tax rates alter ...

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