Ask an Economist
Would the transition be better if I pursued pure mathematics instead, because my experiences has been lately in proof making? What can I look forward to? How and what should I be looking into, to start off, if economics is a good choice? I am a highly curious person. Plus, I have worked hard, I have been doing pure mathematics on my own since 2004 until presently; but, it has been slow going; so, I thought that by going into something that has a better return in investments of my intellectual energy, I should try microeconomics?
The prospect of a mid-life career change would be daunting for anyone. In the end, you’ll have to make that difficult decision on your own. But I can give you a few tips on how you might begin to explore whether a career in economics...
After about a month when the commodity has less than 2 weeks of shelf life it may be sold at .69/lb and then discarded after another week.
1) Why would the store not further discount these items at let's say .30/lb to clear the complete stock? ( I understand it is so as not to let the global/US prices of the commodity go down.)
2) Is wasting better for the store than to sell it at a discount?
3) Even if customers stop buying fresh commodity and start to wait until the price goes down to .30/lb. Isn't it economically profitable to the store to actually sell it than waste it ?
Thanks
Food waste arises from preferences, incentives, and constraints. Retailers have time and other resource constraints which implies that it simply will not be worth it to sell every last item of food in every instance. It can be said that there is...
Okay, so this is going to be a really stupid question but I need to know the answer to this. There is a message board about collecting video games and we got into a argument about the definition of the word "rarity." With these games, we all know the exact amount of copies printed for each title. Say Game A has 2000 copies printed and Game B has 5000 copies printed. Assuming that no copies are lost or destroyed, Game A will always be rarer, correct? Someone else is arguing that the availability of copies on the secondary market changes this.
If Game A has 20 copies available on the marketplace right now and Game B only has 2 copies, would Game B be considered to be rarer overall? At that moment in time, sure, but overall, I would say no. Is either of us correct? Would the monetary value of the game on the secondary market change the definition of rarity? Thanks for your time!
In the strictest (or standard) sense of the word, you would be correct that game A is “rarer,” given that there are fewer of these in existence than game B. However, the other person is not totally wrong because, in the words of economists, the “...
I have a few questions;
1. Will canceling my debt negatively impact my credit score?
2. Will I be able to get future student loans if I want to go to graduate school?
(The process states that I WILL be able to get those loans if I waive some stuff and agree to have my old loans reinstated). But my question is more basic:
will anyone give me a loan?
References;
https://studentaid.ed.gov/sa/repay-loans/forgiveness-cancellation/disability-discharge
https://www.insidehighered.com/news/2019/08/22/trump-administration-grant-disabled-veterans-automatic-loan-forgiveness
1. The most common credit score is of the form used by FICO (Fair Isaac Corporation). The calculation has five components, payment history, amount owed, length of credit history, new credit, and type of credit used. The first two...
For such a strategy to work at the least following two conditions must hold:
- each time you transact, you need to correctly pick a stock that would eventually rise in price by enough to offset the bid-ask spread and transaction fees you...
Does economics provide any model by which one can infer anything about actual selling prices for something, based only on data obtained from published asking prices? For example, if we had a data set of ~3000 sales over 20 years, and we knew that asking prices in real dollars were basically flat, would that tell us anything about the selling prices? Would they also be flat? Or maybe instead would they be gradually approaching the asking price? I have no idea.
Thank you.
The question you are asking is about the bid-ask spread. The bid is what a buyer wants to pay for an item. The ask is what the seller wishes to receive. You know the ask, you want to know the bid. The bid would be demand, the...
Thaler and Sunstein in their book define nudge as “any aspect of the choice architecture that alters people's behavior in a predictable way without forbidding any options or significantly changing their economic incentives.”
...Purchasing a vehicle from an American car company that is mostly manufactured overseas with foreign parts (list for reference: https://www.motorbiscuit.com/3-american-cars-that-are-barely-made-in-america/)
Or,
Purchasing a vehicle from a foreign car company that is mostly manufactured in the US with US made parts (list for reference: https://www.usatoday.com/story/money/cars/2018/06/22/american-cars/724724002/)
This question addresses an important debate in the current economic climate in which global production network and offshoring are prevalent. Economic research on this topic from both theoretical and empirical aspects is vast and is still ongoing...
Economists and economic historians in particular have been quite interested in the economic impacts of slavery and its aftermath, including the effects of race-based discrimination. There is by now an extremely large and extensive...
The unusually shaped yield curve was in the news the other day. But it was attributed to the Fed buying 10-year T-notes, which temporarily lowered their yields relative to notes/bonds with shorter maturity. It sounds to me the quote cited by...
Trumps tariffs are collected by U.S. customs officials when Chinese goods are imported into the US. They are not collected on goods imported from Japan. However, the tariffs have created worldwide perturbations and there may be modest second...
I'm reading through this paper and while I can think of reasons why some of the conclusions might be true I don't get how empirically they are reaching their conclusions.
1) According to page 16 item #23 "The empirical results show that inequality has a negative impact on economic growth. The baseline results are reported in columns 1 to 4 of Table 1" and then goes on to explain its reasoning why inequality negative impacts growth and says "Based on the estimated coefficients in column 1, for example, lowering inequality by 1 Gini point would translate in an increase in cumulative growth of 0.8 percentage points in the following 5 years".
2) In item #29 (page 19) they go on to say "Taken together, these results suggest that inequality in disposable incomes is bad for growth, and that redistribution is, at worst, neutral to growth". Again while I can think of some reasons why this may be the case (and some reasons why it may not like if some of the wealth leaves the country so as not to get redistributed depending upon implementation) I'm not sure how they are coming to that conclusion empirically.
3) Then several times they estimate what the impact on growth would be for every % change in the Gini index but I'm not sure how they built that numerical assumption.
I came across the paper because I was trying to do some simple research into whether income inequality can lower the velocity of money (though so far I've just pulled some data from FRED on MZM and the Gini index and found like a -.46 correlation.
I'm hoping I could learn from someone to better understand how the tables this paper provides actually translates into the conclusions they claim; I don't know how to properly interpret the tables.
https://www.oecd-ilibrary.org/social-issues-migration-health/trends-in-income-inequality-and-its-impact-on-economic-growth_5jxrjncwxv6j-en;jsessionid=g-XlVT6DTb4_r_CW_3M5veza.ip-10-240-5-57
Thanks!
Christopher
1) According to page 16 item #23 "The empirical results show that inequality has a negative impact on economic growth. The baseline results are reported in columns 1 to 4 of Table 1" and then goes on to explain its reasoning why inequality...
The term you are looking for is product differentiation. This is the name we give to a class of models (most prominently, the Hotelling linear city and Salop circular city models) where firms may have identical production costs and competition is...
The challenge in describing a large economy with more than 300 million people in it is in finding helpful ways to simplify the data. Economists often measure economic performance by using one very simple statistic: income per capita, which...
For consumers, changes in prices and per capita income are influential determinants of demand. Consumer demand is often measured as an elasticity, which is a relative measure, providing a useful means of comparison across all ranges of quantities...
In theory, a stiff and swift increase in the minimum wage may result in less employment (of minimum-wage-eligible workers) and may increase prices to some extent as firms pass on higher wage costs to their consumers. But it does not follow that...
Some of it is read by computers and some by humans. An online marketplace like Amazon's Mechanical Turk, employs millions around the world (including the U.S.) to work on these tasks at wages of 5 cents an invoice. The argument can be made that...
Since I am not an economist, I am asking out of curiosity, not criticism and would like to better understand this situation. Thank you for your consideration and any response.
Yes, there is a potential for double counting---in the case of publicly traded companies included in the SP500 that are also held in the Berkshire's portfolio (e.g., Apple or American Express). The extent to which this may skew any ratings or...
Cheers,
Abe
On January 29, 2019, Meat and Livestock Australia (MLA) released updated forecasts, the general link is:https://www.mla.com.au/prices-markets/...
Alexander Hamilton was, as the musical portrays him, an influential figure in the early history of the United States. A full description of his views about and impact on financial arrangements in the newly formed United States would be well...
The easiest way to see the connection between Month on Month Inflation and Year on Year inflation is to take a step back and recall where these numbers are coming from.
The inflation numbers we see reported are reflecting the...
Also, who carries out these imports/exports or who decides it's better to import/export certain products? Is it private sector industries or is it government influenced.
So back in the previous examples of USA producing planes and China producing Electronics both with comparative advantages over each other. We know in real world examples Boeing in the USA produces planes and Huawei in China (along with many others) produces Electronics.
Does this mean Boeing should export planes to China, but what has this got to do with the Huawei company in China? They don't necessarily care about planes at all? Their business is electronics?
Does it also mean Boeing should use Chinese electronics on their planes (which I'm sure they don't)? This is where I am struggling to see the real world examples of it all, and understand WHO works out what products should be Imported/Exported from specific countries etc.?
Also who works out what country would be best to import goods from and what countries are best to export goods to?
I live in Ireland, and obviously dairy farming and beef are big exports here. But is it down to the individual farmers to understand these economics, or would the government figure a lot of this out?
Prices will drive the system. For example Ireland has a comparative advantage in cheese and butter due to climate and a large amount of land suitable for dairy cows. China has a comparative advantage in electronics because it has an...
Thank you!
The balance of payments accounts are maintained on a double entry basis. An import of $1 million will show as a negative $1 million entry in the Current Account. When the Chinese exporter receives and deposits this $1 million check in its Chinese...
Fundamentally the change of the exchange rate reflects the difference of productivity growth between China and U.S.. In the past decade, the productivity of China grew faster than U.S. and therefore we see a long-term appreciation of RMB over U.S...
I recently had an argument in my fantasy football group that I believe an economist can answer. I need to define some terms and give some background before I get to the question.
I am in a 12 team league and we conduct a snake style draft every year to pick our players. A snake style draft is one in which teams are assigned a draft position and the draft is conducted 1-12 in the odd numbered rounds and 12-1 in even numbered rounds. Our rosters consist of 16 players. Every year your roster completely resets and we redraft in reverse order of standings (meaning that the team that finished last picks first and the team that finishes first picks last) with the following exception. You are allowed to keep up to 2 players, one player that you drafted (class B) and one player that went undrafted the previous year (class C). Provided that they are on your roster on Thanksgiving.
Players can be divided as follows:
Class A1 players cannot be kept by definition, and cannot be dropped from your roster.
Class A2 players cannot be kept, but can be dropped from your roster.
Class B players can be kept by giving up a draft pick that is 3 rounds earlier than where they were selected the year prior. i.e. If they were selected in the 5th round you would have to give up a 2nd round pick.
Class C players can be kept by giving up a draft pick that is three rounds later then where they are projected to be picked that year. i.e. If they are projected to be picked in the 5th round you have to give up an 8th round pick to keep them.
Generally speaking, Class A1 players are more talented than Class A2 players, who are more talented than Class B players, who are more talented than Class C players. Also, it is impossible to know how good a player will perform in future years, or what their projected draft position will be because those projections are not released until July of the following year.
As a result of these rules I adopted the following strategy after I was eliminated from this year's playoffs. I dropped all Class A2 and B players from my roster and picked up 16 Class C players using the following logic. Class A players are worthless for future years because I will lose them for nothing when the rosters reset. Class B players require me to pay a premium to keep them, and because they would need to vastly overperform expectations they are not worth the investment. Class C players are the least talented of the bunch, but I will have 16 chances to pick one that is in a good position to perform well, and I will get that player at a discount because I will be able to draft them later than when the market says they should be drafted. The other teams do not acknowledge this as a legitimate strategy. I believe that this illustrates relative value (valuable players that have no value considering my circumstance), opportunity costs (roster spaces that have worthless players but could have players with some value), and expected value (players who are worth very little now, but may have value later and can be drafted at a discount).
What do the economists think of my strategy?
As a post script, I tried to trade Class A players for Class C players before dropping them, but no team would trade with me because they thought I was giving up too much value for nothing.
Thanks for your ‘Ask an Economist’ question. I will provide some thoughts, but may not be able to answer it completely to your satisfaction given I do not fully understand how your fantasy league operates. For example, you do not...
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