Ask an Economist
1) What do economists think of the Lange model: https://blogs.cornell.edu/info2040/2015/10/19/the-lange-model-of-socialism/? Does it adequately address the economic calculation problem? Tying into this question, is it true that Robin Cox is thought to have won the debate around the ECP? Or was it Mises, Hayek, or James Scott?
2) Finally, I would appreciate any insight toward this economic system: Instead of prices, it uses calculation in kind. It accomplishes this by decentralizing economic decision-making, by means of turning firms into self-managed associations joined in horizontal federations, which assess how much is taken at distribution centers by means of book-keeping and assess how many physical quantities of the goods they particularly use are required. I know this is a bit brief, but the part of this comment that explains this further starts with "But now, there is still a question to answer, how could an economy not based in prices make rational decisions" (it's toward the end).": https://www.reddit.com/r/CapitalismVSocialism/comments/4ib76d/automation_capitalism_v_socialism/d2wx6la/?utm_source=share&utm_medium=web2xthat.
Any insight would be greatly appreciated!
1. A mainstream neoclassical synthesis economist would say that this system can be doable but it has what we would call a lot of incentive compatibility problems. It is not only the fact that the government needs to be accurate in...
If the principle has a name, I suppose it would be DIVERSIFICATION. But, given the inclusion of the words “boards to research new uses for their product,” the questioner may also be asking about how do agricultural industries decide whether to...
Currently, DOCSIS 3.1 modems are widely-used as they support speeds up to 2 Gbps (5 times the bandwidth of the 3.0 standard). Of course they cost more. In the real-world situation my friend faces, should he pay $117 for the 3.0 modem or $149 for the 3.1 modem?
My argument for 3.1 is this: Modems last a long time. About 7 years ago, I had subscribed to faster internet service and was only receiving about 1/3 the bandwidth I was paying for. I learned that I needed a modem that supported the faster speed. After research, I learned I needed a 3.0 modem (the current standard at the time). I bought the new modem and instantly experienced the significantly faster internet I was paying for. I've had my current modem for seven years (and I'll upgrade to 3.1 if I ever subscribe to gigabit service). Even at a life expectancy of 7 years the difference is 38 cents per month.
In many regions, gigabit internet is becoming standard. In the next several years, I anticipate that gigabit will be the default service offered by providers. If you have a 3.0 modem, you effectively will only be able to harness up to 40% of the capacity you're subscribed to.
His argument for 3.0 modem is this: He's had 75 Mbps internet service for years now and he's fine. He lives alone (38 year old male). He claims he is certain he won't partner with anyone. He says he will never need more than 400 Mbps anyways. If he ends up with gigabit service and can only use 40% of it, it won't matter.
Individual consumers have different preferences and information, which guide those individuals to choose what is best for themselves. Your friend seems quite determined that he will not use faster internet even if gigabit service were to be...
The idea underlying diversification is to achieve a desired expected rate of return at the smallest possible risk. If there are two investments that are perfectly negatively correlated, then by investing in both you could achieve a rate of return...
I've tried to find any information that relates to this question but have been unable to find any due to my limited grasp of complicated economic systems and how they interact with one another. My main hope is that exploring this line of thought might lead to a solution of being able to pay rent and have the ability for upward mobility no matter what your income is.
Traditional economics tells us that price ceilings lead to shortages. A lower price encourages sellers to reduce the quantity they supply to the market. A lower price also encourages buyers to increase the quantity they demand. As a result,...
I think you are using the term "nationalize" to mean the US government buying US farm products. The US is a major exporter of meat and grains and these products are typically more expensive in other countries than they are in the US. So the US...
It seems there are two markets for condominiums: units that allow dogs (Market Dog) and units that do not (Market Sad). My black lab mentioned that the latter group are probably sad folks. OK – my econ jokes in class aren’t any better.
On...
The controversy over President Trump’s suspension of temp worker visas got me wondering if there might be a connection. I have seen both sides argue about the effect of H1B visas on employment and salaries, both in IT and in the nation at large, but I am wondering about the effect on entry into the field.
The reason I wonder is that IT skills are very transferable, and a citizen or green card holder is much more able to take advantage of that ability, while a worker on a temp visa may require a bigger benefit to justify the hassle and risk of leaving. In this hypothesis, corporations choose temp workers instead of potentially training their competition’s talent, and not because of a salary differential. Over time, this degrades the pool of local employees, justifying further temp worker visas.
My two questions are, one, is this economically plausible? And two, is there any evidence of it occurring in the US?
I think the basic mechanism you describe could well be part of the complex story of how the H1-B visa affects domestic workers in IT. The H1-B visa program does expand the supply of workers for certain kinds of jobs, potentially reducing the...
I will try to answer the questions as I interpret them, but first, it is important to explain what the facts are.
Annual compensation includes wages and salaries, but also benefits. Benefits including federal social insurance taxes,...
Iowa has updated the soil productivity system from Corn Suitability Rating (CSR) to Corn Suitability Rating 2 (CSR2) in 2013, and the USDA NRCS Web Soil Survey tool allows you to compute the new CSR2 for your farm (Google ISU Extension Ag...
Artificial Intelligence is likely to impact all of our jobs, just to varying degrees. Specific tasks that we need to perform in our jobs, skills required, wages, and hours will all likely be adjusted. There will inevitably be winners and losers...
I'm very curious what an economist thinks about the automotive repair trade. We aren't really a professional industry as there are no requirements or licenses to become a professional repair technician or work in a professional repair facility. Auto repair has become extremely high tech and sophisticated, in many areas, but also retained many of the same procedures from decades and decades ago with maybe a few changes. So, we have the need for two distinct types of individuals. The thinkers and the doers. Thinkers for the analyzing of systems and data for diagnostic decisions and dealing with technology (computers both on the car and to be used in the shop for scan tools, oscilloscopes, programming, coding, etc.). Doers to take it apart and put it back together efficiently and properly.
Most repair facilities are operated by former technicians. They are not businessmen/women. It is often discussed how, with the commoditization of our services, we are in a race to the bottom by greatly undervaluing ourselves and each other. Many are in this race and unwittingly standing on the gas.
This sounds like a rant and perhaps at some level it is. But I'm seriously interested in the opinions of those that are businessmen/women, who understand economics and game theory (most shops seem to operate on a zero-sum game principle, whether they know it or not).
Automobiles are getting more and more complex, the skill set required to service them is growing and becoming much more difficult to find and retain. Many other industries are looking for the skill sets, or a small fraction of the skill sets that many automotive technicians possess, that have far greater means to compensate for those skill than the auto repair trade currently has; a problem they've created for themselves with the constant undervaluing of their skills, knowledge, and services.
I suppose the easy answer is that it is a total "clusterf^&%" but will either solve itself or crumble altogether, I just wanted to hear what someone that knows what they are talking about thinks, and maybe even entice them to look into it and find out more about our trade.
Auto repair is an example of a "credence good," which is a type of product or service where an expert knows more about the quality the consumers need than the consumers themselves. These kinds of markets can work poorly if consumers are unable to...
Economists generally agree with Henry George that land value taxes promote efficient use of land. A small country with a tourism-based economy seems like an excellent case for the efficiency of a land value tax. The bigger issues concern equity...
You have asked a very interesting question. Without more specific information, it would take volumes to answer this general question appropriately; however, I can point you to a few resources that may be useful.
...
In short, there are probably many ways that you could get a rough estimate of this and they are all likely flawed in some way or another which makes this a really tough question to answer. Also, we probably haven't fully realized the impact of...
What measures can be taken to keep the cattle industry in the U.S. from imploding? What can prevent vertical integration from further occurring? How can the American farmers and ranchers be kept from bankruptcy, (without gov’t subsidies or handouts) making sure that private ownership of land persists? What kind of market manipulation could cause all this?
Here are several resources that begin to address many of your questions.
Beef Marketing Margins - http://jaysonlusk.com/blog/2020/5/4/beef-marketing-margins
...
Thanks a bunch!
Ours is called a consumer economy because consumption is nearly 70% of our GDP. Countries like China, are more investment-driven with investment (often by the public sector) at nearly 50% of GDP.
Economists measure the economic health of a country by its G.D.P per capita. They see low unemployment as good because it means labor resources are not sitting idle. They also consider whether income disparities are good or bad. In fact, these...
In short, we do not know, especially so because nothing like this has hit the US in modern times. The Great Depression was a massive disrupter and devastator but caused ultimately by economic forces from within. This time around, the fundamentals...
We traditionally get our data from two sources: 1) call report filed by banks quarterly which does not go into enough detail to get the information that we want; and 2) the banks themselves when we conduct an examination. Banks generally have concentration reports that will break down debt on many different levels; however, this doesn't give us aggregated point in time data.
I have been looking at the ISU, Ohio State University, and USDA websites in an attempt to get the data we are looking for, but cannot find it. I find news reports or research that mentions these sources, but I can't get to the raw data we are looking for. When I do find data that is close to what we want, it is a couple years old.
Do you have any suggestions on where we can find this data? We appreciate any assistance you are able to give, as we monitor the impact of COVID-19, particularly in the ag sector. Thank you!
Tracy Bergmann
The most relevant reports to track the evolution of the financial situation of well-managed mid-size commercial farms in Iowa are:
- “Financial Performance Measures for Iowa Farms” Dec 2019....
The way in which prices and money enter models of the economy is important and potentially confusing. So this is a great question.
In most models, lowering (or raising) all prices, including the price of labor (wages) would...
The short answer is, no. By law, the U.S Fed is an independent authority in charge of the monetary affairs of this nation. The White House cannot formally ask or force the Fed to do anything. If the Fed tried such a move, it would send panic...
It is common for industries to claim that they create jobs outside the industry, especially when they are seeking government subsidies. A few years back, a consultant for the Iowa ethanol industry claimed that ethanol was responsible for 90...
My best understanding is that the acquisition you indicated was completed in 2007, but Aramark retained its identity as a company. TARP was created in 2008, and a comprehensive list of companies that received “bailout” funds can be found at...
How very thoughtful and considerate a project you have in mind!
You are already exhibiting entrepreneurial behaviors by reaching out for advice. When starting anything new, you need to get questions answered for which you don’t know the...
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