# Tag Info

23

Inflation is measured against a basket of goods. It's a symptom of what's going on in markets. Some products go up in price over time. Some go down in time. Some stay the same price, but change their specification. So it's looking down the wrong end of the microscope, to ask why inflation hasn't affected car prices. Car prices are part of inflation. Changes ...

15

You also didn't look at car prices in general but rather just the Toyota Camry. For example a 2001 BMW M3 was ~\$46,000 while a 2018 BMW M3 is ~\$66,000. Most cars have increased in price over the last 20 years, but some manufacturers will always have a cheap car in their lineup .

9

Specifically treating car prices, well, the prices are determined globally and not necessarily in dollars In the last 20 years: Car manufacturers move factories across borders to save costs, China and India have become major market player both as major manufacturers and as a major consumers As a result of these causes, an additional major impact was added,...

4

There are several issues here: There are banks offering close to $1.5\%$, some well-known such as Goldman Sachs and American Express Most banks currently have excess reserves deposited in the Federal Reserve System which they could use for lending if they wanted to, so they are not missing profitable commercial lending opportunities due to lack of deposits ...

4

Question B in the link answers your question: most participants believe that taxable income would not rise enough to offset the tax cut, indicating that they do not believe we are on the wrong side of the Laffer Curve.

4

Looking at gross output (which includes using the outputs of other industries) and value-added (largely wages and profits) by industry you get numbers like this for 2017 in USD trillion. Adding up the value-added gives total GDP, and you can see that there is a lot more to the economy than manufacturing ...

3

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 estimations. You would require decent data on the firm level and a detailed model dealing with lots of production factors. In other words, lots of work and probably ...

3

The video has a transcript with the references. The \$0.25B figure is obtained from here (after adjusting for inflation). Unfortunately, the author does not provide a source for the \$1.2B figure. However, there are estimates of the value of land elsewhere. For example, here. Their estimates on a map: These estimates consider the value of land only, ...

3

To answer this I have to make some guesses because this is not an area of research for me, but having a spouse from there and having spent time there, I think I could make a somewhat educated guess. Especially because it uses a market system rather than a rate setting system for generation. First, Massachusettes has the third highest population density of ...

3

3

No. Such interstate taxes are prohibited by the Commerce Clause as they would be "undue burdens on interstate commerce". The Commerce Clause is an evolving doctrine that has been largely developed by the courts (in particular the US Supreme Court). The most recent development was South Dakota v. Wayfair (2018). Section A gives a summary of this doctrine's ...

3

This was actually already indirectly answered by the IGM forum. In this question the forum asks economists the following: The US spends roughly 17% of GDP on healthcare, according to the OECD; most European countries spend less than 12% of GDP. Higher quality-adjusted US healthcare prices contribute relatively more to the extra US spending than does the ...

3

Yes there are other factors at play. Inflation is change in a price level. The price level, according to classic textbook monetary equation, is determined as follows: $$P = \frac{MV}{Y}$$ Where $M$ is the money supply, $V$ velocity of money (how much is one dollar used in the economy) and $Y$ is the real output. So beside money supply and real output ...

3

When you hear that "the U.S. birth rate is near or below replacement rate", what is probably meant is that the total fertility rate (TFR) is below 2.1 (replacement rate). It is possible that the TFR is below 2.1, while births exceed deaths. One way this can happen is if there's a rising share of women entering reproductive age. This phenomenon is ...

2

The fear is that higher interest rates would damage the economy. The problem with that worry is that the Federal Reserve could buy bonds itself, to cancel out the foreign selling. The hidden assumption is that this selling would have to be very rapid. If the foreign reserves managers liquidated their Treasury holdings over five years (for example), the ...

2

It wouldn't "ruin the US economy". The US (the country as a whole, not the government) bought goods and services from rest of the world by selling them IOUs. So far, the world has been content to let the US roll over these obligations. If the world decided that they wanted to trade these IOUs for goods and services, the US would have to start running current ...

2

Are there any estimates on how many US Dollars are lost or destroyed annually? By "lost or destroyed", I mean permanently removed from circulation because the currency is no longer usable. The link I offered as a comment covers this question nicely. When Currency Is Physically Destroyed Obviously, not all money is electronic. Just look at your ...

2

There are different arguments here, depending on the points of view of the government and the insurance providers. I'm trying to answer to the general question on the title. Insurance providers aim at minimizing their costs with healthcare and the probability of health issues. Free birth control not only prevents unwanted pregnancy, but might also have ...

2

A fairly standard measure to use would be Gross Domestic Product (GDP). Over the past 30 years, US GDP has been growing at approximately 2.5%. According to trading economics The US economy expanded an annualized 2.3 percent on quarter in the first quarter of 2018, below 2.9 percent in the previous period but beating market expectations of 2 percent ...

2

The entry “offering amount” is the total par value that is being auctioned. (In the example given, this is a reopening of an existing issue, so it is the increase of par value for the issue.) From the perspective of a bidder, the “par value” is what they are awarded, which will only be a portion of the total par value of the issue. (There is a maximum bid ...

2

To be the wrong side of the Laffer curve would require there to be another lower tax rate which produced the same or greater tax revenues That is not what was being said: Question A addressed the sign of the impact on GDP, not on tax revenues; Question B addressed the sign of the impact on tax revenues; nobody agreed and the large majority disagreed ...

2

You're not considering that today's $23,000 car might not be the same car as the one from 20 years ago, or that the costs of its manufacture might not be the same. While the "basket of goods" another answerer referred to has simple items in it like rice, soap, tee-shirts and hammers, a car is a very poor item to measure inflation with, because of its ... 2 The exact details of payment systems vary from country-to-country. The payments systems handle the multitude of transactions. But if we are willing to simplify away the complexity of payment processing, private banks do have an account at the central bank, and transfers between banks are effectively transfers between those accounts. The central bank is a ... 2 It depends. Mathematically, you just need GDP to grow at the same rate as the debt grows, and then you can sustain deficit spending indefinitely. But this simply shifts the line of questioning to "can GDP grow indefinitely", and for most people the obvious answer is "no". Ironically, the band-aid solution that most developing nations have taken is to grow ... 2 Look at the implicit price deflator for GDP. Using the annual series, 1946=11.05, 1956=15.32, so 38.6% increase. (Source: FRED database) I don’t have time to look at the paper, but that’s possibly what was meant. Not an entirely convincing methodology, but you would have to do something with the deflator as well as nominal GDP to allocate changes. 2 See this federal Reserve webpage that provides links. Note that these are aggregates; there are specialised reports on various components of their balance sheets. The FRED website has these series in an interactive database. 2 I will only add to 1muflon1's answer that: The most important distinction you have to make is between real income ($ Y $) and nominal income ($ P*Y $); Textbook cases imply that, for$ MV = PY $, then$\frac{ΔM}{M} = \frac{ΔP}{P}\$. So yes, it is expected from almost every basic model that dwells on the subject, that prices will rise for the same amount money ...

2

The economy is not a zero sum game with a fixed number of jobs available. If it were, then restricting immigration or at least the access immigrants have to jobs would unambiguously benefit domestic workers. However, H1B immigrants, in particular, are frequently skilled workers that increase the productivity of the companies they work for, creating ...

1

Pay as you go vs Fully funded pension plan distinction is relevant here. Also known as Defined benefit vs Defined contribution. If everyone saved for their own pension via payroll taxes or otherwise (Pay as you go/ Defined contribution), then the ratio of retiring to contributing people indeed would not matter. However, most governments pay current ...

1

The answer is yes, also because the global economy is highly interconnected in total. If there would be no trade possible between two economic areas, it would have an impact on the economy globally. The Germany US example would change Germany a lot. The US is an important market for the car manufacturers, the chemical and pharma industry. Eight of thirty DAX ...

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