Most Popular
1500 questions
18
votes
5 answers
How does everyone not become poor over time?
Look at the whole world --the union of all goods and services and workers and customers. Everyone who is a customer is a worker somewhere (they had to get the money to be a customer somehow). But not all revenue goes toward worker wages--some goes…
DeeDee
- 331
- 2
- 6
18
votes
2 answers
Supermarket selling seasonal items below cost?
In a British supermarket, I saw the prices of Christmas chocolate gift boxes being cut dramatically (£1.50 to £0.15, and £7.50 to £0.22). I don't quite understand this behaviour, where the chocolate boxes are sold (presumably) below cost.
I've…
mck
- 283
- 2
- 6
18
votes
3 answers
Why do wages not equalize across space?
In standard economic theory wages are simply prices on the labor market determined in equilibrium by the supply and demand of labor. Looking across space within countries it is however standard to find a relative large variation in local wage…
Jesper Hybel
- 3,316
- 12
- 36
18
votes
2 answers
Why is capital income taxed differently than wage income?
Why is income from capital gains taxed differently than wage income? There are perhaps historical, practical, and theoretical reasons. What are they?
(As far as historical reason go, I'm asking primarily about the United States. If anybody has any…
jmbejara
- 9,345
- 5
- 30
- 80
18
votes
2 answers
How accurate is duality?
In economic theory we know that with the use of some calculus, Hotellings Lemma and Sheppards lemma we can derive a given firms supply function and in term its Profit function.
With data of a given firms costs, can we in fact get an accurate…
EconJohn
- 8,345
- 6
- 30
- 64
18
votes
6 answers
Productivity vs real earnings in the US -- what happened ca 1974?
Somewhat related to the most recent US elections, I've been researching the whole "white working class" situation, and one strange anomaly has popped up.
When one looks at a graph of productivity (for the US) vs real wages, there is a marked…
Hot Licks
- 356
- 1
- 2
- 15
18
votes
2 answers
Is the Occupy Wall Street famous 1% stable?
Occupy Wall Street has a famous slogan "we are the 99%", refering to the "fact" that 1% of the people in the US take nearly the quarter of the national income. However, this does not seem to consider that many people with extreme incomes have very…
Cass
- 183
- 1
- 4
17
votes
4 answers
I lost $100 in the laundry, who won?
I lost a 100 dollars bill in the laundry (it was destroyed).
I clearly lost 100 dollars.
Where are they now? Who won 100 dollars?
user5498
- 187
- 3
17
votes
4 answers
Why is fractional reserve banking allowed?
I learned about banks' fractional reserves and that revolted me. How is that not considered to be fraud?
The idea doesn't seem too sophisticated, on the contrary, it sounds very simple: the bank just loans money they don't even have and charges an…
Mandrill
- 303
- 2
- 4
17
votes
4 answers
Is there any way retirement systems can cope with declining population?
Data show that population in developed countries will start declining by end of this century. Because this is due to low birth rates and aging this will lead to very large imbalance between economically active people and retired people who are…
Ezekiel
- 506
- 4
- 11
17
votes
5 answers
Implications of abolishing Fractional Reserve Banking on mortgages and interest rates
Suppose for a moment that someone with legislative power decides to abolish Fractional Reserve Banking and passes a law that forces banks to only lend the money they own, that is M0.
What would be the economy-wise implications of such a change in…
matcheek
- 371
- 1
- 10
17
votes
2 answers
What is the importance of Epstein-Zin preferences?
I've heard that there is a lot of work being done recently that applies Epstein-Zin preferences. The Wikipedia page doesn't seem to be very full.
Why are Epstein-Zin preferences important?
How does recursive utility differ from other preference…
jmbejara
- 9,345
- 5
- 30
- 80
17
votes
4 answers
Why can't a country print its own money to spend it only abroad?
If a country prints money and distributes it between the people, it causes inflation. But what if a country prints its own money to spend ONLY abroad, which would allow a country to buy whatever it wants. What's wrong with this logic?
Dylan Zammit
- 273
- 1
- 2
- 5
17
votes
5 answers
Has an increase in housing supply in popular cities including Amsterdam led to an increase in house prices?
Common economic thinking dictates that an increase in price should lead to an increase in supply, and that an increase in supply should then lead to a decrease in price. According to Maarten van Poelgeest, former alderman of Amsterdam, the opposite…
gerrit
- 1,754
- 11
- 26
17
votes
3 answers
Complete Markets in Continuous Time
In the standard discrete time economies with a finite number of states, $n$, a complete markets economy is simply an economy with $n$ independent assets (Think Ljunqvist and Sargent Chapter 8). This is because $n$ independent assets is sufficient…
cc7768
- 1,613
- 1
- 13
- 29