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The most popular reviews in /r/AskEconomics:
Principles of Economics by Mankiw. You can get old, <strong>used</strong> editions for cheap.
It’s not sexy; it’s a textbook. However, it’s by far the best way for you to get a feel for basic theory and to understand the discipline.
over the last 40 years, pay of ordinary workers has gone up 12% total.
However, a big bowever. "average pay increased faster than inflation for only two groups of workers, black female college graduates and workers with at least two years of post-graduate education. Everyone else fell behind " (plotkin and scheurman).
I am currently reading a book on this topic. Dealing with how rapid automation and new foreign competion leads to the loss of American cooperate jobs. Leaving the usually ununioniazed and easily abused mom and pop shops to bare the brunt of a new working class.
This one comes up a lot.
Yes, he's mostly reliable. However, it's important to keep track of what he's biased about. As a conservative author, he'll use whichever models support his positions the most and have errors of omission by not including other ones. He's not really ever blatantly wrong so much as he can be a little misleading at times.
I have an undergrad degree in econ and am generally an enthusiast. I use Sowell as a reference here and there or for when I want to use just english to explain something to someone (Sowell has no math at all in that book, which is kind of nice).
Since you're just starting out I'd recommend Tim Harford's The Undercover Economist and The Undercover Economist Strikes Back as better intro pop econ books than Sowell.
You can construct most of micro from
- Choice theory
a. People have complete, transitive preferences over bundles of goods and services.
b. People choose the most preferred bundle in the choice set.
- Production theory
a. Firms have technologies to convert inputs to outputs.
b. Firms choose the input-output bundle that minimizes cost or maximizes profit.
- A specification of the institutions governing interaction between agents
a. In the simplest case, this is the anonymous, price-taking market.
b. But it could be more complicated, as in a game theory model.
c. Usually this goes under the heading of an "equilibrium concept."
Fair trade is a conception political in origin, and generally misguided. Imagine the inefficiency that would arise by the government trying to dictate your spending and producing choices under the guise of fairness? Voluntary exchange, inside or outside of political borders, is mutually beneficial.
A digestible and authoritative source on the topic is Paul Krugman. The book Pop Internationalism explains the fallacies of "fair trade" and "competitiveness in trade" in about 200 pages. If that's too much, the economics FAQ has a very good explanation of the economic principles proving the benefits gained from free trade.
>The replication crisis in psychology does not extend to every line of inquiry, and just a portion of the work described in Thinking, Fast and Slow has been cast in shadows. Kahneman and Tversky’s own research, for example, turns out to be resilient. Large-scale efforts to recreate their classic findings have so far been successful.
It's not like the fundamental point of the book has been refuted. It's more like it needs some refinement and adjustment. I still think we have different modes of thinking and we need to address how we think in different circumstances.
If anything, though, the fact that Khaneman fell prey to some errors in thinking actually proves his point that we all need to be vigilant. We are all vulnerable to these errors.
I second the suggestion of Krugman's textbook. Krugman's a good writer and his book is very readable. It's deeper, and thus a bit harder than Mankiw's textbook, but I think more interesting.
There is a difference between one-time change in price level and sustained inflation. Fiscal policy, supply shocks, regulations, market structure and so on can create a one-time change in the aggregate price level, which leads to temporary increase or decrease in the rate of inflation. Friedman's claim is that none of these, but money growth, can generate sustained inflation. So, the only way to decrease inflation is to slow down monetary expansion. In "A Monetary History of the United States, 1867-1960", Friedman (with Anna Schwartz) presents plenty of evidence from the U.S. history to support his claim. However, evidence from one country and one period would not prove the "always and everywhere" statement. In fact, it is probably incorrect. Here is an excerpt from a speech of Masaaki Shirakawa, a former governor of the Bank of Japan, on this issue:
"Fifth, inflation dynamics can vary across countries and time. We should not dismiss factors unique to each country, which includes “real factors”. Labour market practices including the degree of downward nominal wage rigidity, rapid changes in demographics and terms-of-trade changes are examples of factors unique to each country. Japan’s deflation cannot be well understood without considering such real factors. Based upon my observations on the evolving debate on Japan’s deflation, I think we must make more deliberate efforts to incorporate such factors to better understand inflation dynamics."
You should be studying economics.
Here's what economics will not do: economics will not sit you down with Marx's Capital and Friedman's Capitalism and Freedom and have the books fight it out. Indeed, economics will almost entirely ignore concepts like "capitalism," "communism," "socialism," and the like.
Here is what economics will do.
- Economics will teach you about the basic ideas behind resource allocation. You will learn what it means for an allocation to be efficient or inefficient. You will learn about the way economists assess how equitable a given allocation is.
- Economics will teach you how to think about broad classes of resource allocation: market provision, public provision, market provision with public regulation, market provision with public redistribution, etc.
- Economics will not tell you, "market provision is always correct" or "public provision is always correct." Economics will teach you cost-benefit analysis, market and government failure, and how to analyze incentives, so that you can assess which allocation mechanism is appropriate for a given situation.
To do all of this you need to sit down with an introduction to microeconomics textbook and read it carefully.
It's not as fun as "Communism!" "Capitalism!" "Syndicalism!" but it is far more useful.
You might like to read Yergin's The Commanding Heights, which surveys the allocation mechanisms used in different countries since WWII.
No, Alberta doesn't have a particularly generous welfare program; do note that this doesn't mean the lack of a strong welfare program is in any way responsible for Alberta's high incomes though. The short answer is oil and other natural resources. When productivity (GDP) rises, average incomes tend to as well (which also usually reduces poverty).
If you want to see a paper on this, there are a couple. This one explores the impact of changes in oil prices on both GDP and income. This one estimates the cumulative impact of the oil & gas industries on Alberta, but do note their estimates are on GDP, not GDP per capita. This is important because a strong economy attracts greater population, especially at the provincial level.
Ricardo and Marx are really dense. Smith and Keynes are fun to read. I'd recommend Heilbroner's 'The Worldly Philosophers' as a good overview of the history of economic thought (and covers these primary sources as well).
Just to let you know this sort of thing is illegal in the EU, though not in the US.
Planet Money did an episode talking about the issue.
If it's in USD; you need to look also at the exchange rate.
Dollar was appreciating against the Euro in that timeframe, losing around ~20% from 2010 until about mid 2017. It was ~1.35 at the start of 2010; and hovered around 1.10 for most of 2016. The Euro now appreciating against the dollar (while the EU economies continue growing) so 2017 data when it's published will show a big jump (measured in USD).
Here are two graduate-level textbooks on econometrics:
You can flip through the table of contents to get an overview of the topics covered.
Prerequisites include multivariable calculus, linear algebra, probability theory, and mathematical statistics. In a typical first-year PhD econometrics sequence, some fraction of the first semester is devoted to a review of probability and statistics.
One may find several counter examples: The U.S. is large and rich, Mongolia is small and poor.
In fact, the countries with good institutions (well-functioning markets, protection of property rights, sensible economic policies, high quality education, political stability etc.) have faster capital accumulation and higher productivity growth, thereby developing faster. Those with poor institutions stay poor. (See Why Nations Fail)
It's fine if you think I'm wrong, it's another thing alrighty to think that established economic knowledge and Nobel laureates are wrong.
If you have any evidence to support your claims, please present it now. Otherwise, stop posting here.
>YouTube channels
no such things as good economics channels. Only instructional ones (actual teachers going through problems) and like crashcourse. 99% of all economics videos on youtube are crap.
These are books:
Snowdon and Vane, Modern Macroeconomics: Its Origins, Development, and Current State, 2005. An exposition of the various schools of macroeconomic thought. Requires a year or two of economics training to appreciate, but could easily be a companion book to an intermediate course in macro.
Heilbroner, The Worldly Philosophers, 1999. This is an excellent introduction to the "history of economic thought" (which is separate from "economic history," mind). It covers major thinkers from Adam Smith through Keynes and Schumpeter.
From the /r/economics reading list
Academically, one of Friedman's main opponents was James Tobin.
In the popular sphere, James Galbraith comes to mind. It's useful to read Galbraith's popular books (The New Industrial State, The Affluent Society) alongside Friedman's popular books (Free to Choose, Capitalism and Freedom).
Blaug: Economic Theory in Retrospect (comprehensive treatment)
Heilbroner: The Worldly Philosophers (shorter and more "popular" than Blaug)
Snowdon & Vane: Modern Macroeconomics (focuses on 20th century macro, more technical)
I assume you heard about this story from The Undercover Economist Strikes Back?
But yes, assuming the economy isn't in recession (and even if it was, the effect on the money supply would be tiny), burning £1,000,000 doesn't deprive others of goods and services, it deprives the people who have burned it.
Imagine a society in which n people make x goods, and trade them between each other. In order to facilitate exchange, each person has y tokens.
The price level will be n(y/x).
If I get sell my goods, x, and then burn my tokens, y, the economy hasn't lost those goods. Instead, I've given up my ability to bargain in the market and buy goods.
Now the price level is n((y-y_i)/x), giving more buying power to everyone.
Deficit spending isn’t suppose to be a critical tool, just increased spending that can also happen to be deficit spending iirc. Basically we shouldn’t be afraid to spend more during recessions as many nations have previously made the mistake of cutting spending back and trying to treat the government as a business when revenue went down.
Also the 3% isn’t arbitrary, essentially 3% of the GDP is suppose to allow the deficit to not out pace GDP growth during booms as the nineties and some of the 00’s exceeded that: https://www.statista.com/statistics/188165/annual-gdp-growth-of-the-united-states-since-1990/
Also, the punishment isn’t that arbitrary either, as the purpose of the punishment would be to take away the incentive of going into debt as politicians generally have one goal: to get reflected. Or to maximize: (marginal votes obtained /marginal campaign dollars spent). Enforcing the status quo is the reason they go into debt. They subsidize companies that are major employers because no one wants to be the reason why their voters are unemployed (due to factories moving out of the voting district) when the next election comes around: there’s a good video on this and I believe it pops up on YouTube if you google “political engineering, Boeing." Luckily, one of my favorite political science books goes into it and I would check it out: https://www.amazon.com/Dictators-Handbook-Behavior-Almost-Politics/dp/1610391845
There is a difference between being seflish and being self-interested. Self-interest is concern for one's own well-being. Selfishness is excessive or exclusiv concern with oneself : seeking or concentrating on one's own advantage, pleasure, or well-being without regard for others.
Being self-interested does not preclude concern for others. In fact, strong self-interest is at the core very unselfish people. If you don't care about yourselfy, then how can you care about others?
Adam Smith's famous line > “It is not from the benevolence of the butcher, the brewer or the baker that we expect our dinner, but from their regard to their own interest.”
is where a lot of economists get their notion of self-interest. However, when he wrote this in The Wealth of Nations, he was presuming you read the prelude Theory of Moral Sentiments where he meticulously lays out how self-interest stems from empathy.
This is because of accounting: Savings - Investment = Exports - Imports
And as capital and technology flow to low wage nations, their wage rates will rise along with their productivity. This will cause exports to become more expensive, and importing goods to become more attractive, ultimately causing trade deficits
Paul Krugman gives a much completer answer in Pop Internationalism (page 76 and 90).
Granting a subsidy to a local producer is essentially the same as imposing a tariff on foreign ones. It allows the local producer to produce at a lower cost than their foreign competitors.
For example, suppose China imposes a 5% tariff on all imports of steel. Foreign steel is now 5% more expensive, so buyers will buy Chinese product. Say China instead just grants a 5% subsidy on all local producers of steel. Foreign steel is still 5% more expensive so nothing's really changed. The two situations are pretty much the same.
>why can't they do the same?
It would essentially undermine all the efforts of the WTO to eliminate tariffs.
>What is the problem with giving money to an industry to increase its competitiveness?
This ties into why the US would trade with other nations at all, and that argument is based in efficiency. If your industry isn't competitive with foreigners it's generally because your costs are too high. If you can't get the costs down to be competitive, it looks like you're in the wrong line of work.
Before you jump at me with "but all those people and all those jobs etc." please read Krugman's <em>The Accidental Theorist</em>. He outlines a pretty good case for industry switching and how it relates to employment.
>It's not a game, it's definitions.
https://www.merriam-webster.com/dictionary/socialism
If you want to play the 'definitions game', i'll direct you to the actual dictionary and not the surely unbiased worldsocialism.org.
>1 any of various economic and political theories advocating collective or governmental ownership and administration of the means of production and distribution of goods
> 2 a : a system of society or group living in which there is no private property b : a system or condition of society in which the means of production are owned and controlled by the state
The USSR fits almost all of this. They advocated collective/government ownership of the means of production. They were a system of society without significant private property. The means of production were controlled by the state.
Or Wikipedia, which says
>Socialism is a range of economic and social systems characterised by social ownership and democratic control of the means of production;[10] as well as the political ideologies, theories, and movements that aim at their establishment.[11] Social ownership may refer to forms of public, collective, or cooperative ownership; to citizen ownership of equity; or to any combination of these.[12] Although there are many varieties of socialism and there is no single definition encapsulating all of them,[13] social ownership is the common element shared by its various forms.[5][14][15]
The relevant part being bolded. The USSR was characterized by social ownership of the public form, which is one of the varieties of socialism.
>This is a bad joke, if this sub was run like /r/AskHistorians your comment would have been removed.
If you think we're awful, nobody is making you stay.
I suggest you to read this article: The Making of an Economist Redux. It also has a comprehensive book version.
The Armchair Economist by Steven Landsburg
The Undercover Economist by Tim Harford
50 Economics Ideas by Edmond Conway
The Little Book of Economics by Greg Ip
Now, these are not text books, however for a layman looking to 'get' economics, these offer a sound and informal introduction to economic ideas and the way economists think about economics, without asking too much of the reader in terms of equations or heavy math. Certainly they can be used to 'springboard' oneself into more academic and deeper works.
There is not a finite set of work to be done. See "Economics in One Lesson". There's no goal post that says, "when we have completed these tasks, our total work is done"
There is no need for cars, computers, or airplanes to exist. Really, when we were at hunter/gatherer levels of society, we had everything we needed. Every time we add automation, it does not delete jobs, it moves them.
It's the most used textbook series worldwide, I believe, and there are free pdfs online. If you want to understand economics, there is no substitute for reading textbooks.
Consider that the opportunity cost of reading about 3 pop econ books is (the econ understanding gained from) reading Mankiw's combined text. And the latter is worth probably 100x more to your understanding.
When I said 'Capitalism and Freedom' is great, it was great because I read it and was able to appreciate it because I had a background on the topics covered. It is NOT a book from which to learn principles. You have to learn principles to appreciate any pop econ book and any economic argument or consideration.
If you truly want to understand economics, I wouldn't read capitalism and freedom, or any pop economics book, until you have read micro and macro principles textbooks, or at the very least Mankiw's combined text.
I'm not trying to be high and mighty, you can still read Capitalism and Freedom-- I'm saying this because you said you wanted to understand economics.
Capitalism and Freedom is great. I think for a serious understanding there's no substitute for textbooks. I recommend Mankiw's principles texts. I think reading even his combined text would be better than reading an equal page # of pop econ books.
No, not particularly, which is why it died out. Imperialism was based largely on the ideology of mercantilism, in which wealth was thought to be based on how much gold your country had; which led to protectionist policies (to prevent outflow of gold) and countries to look outside the continent for places to go and extract more gold. Adam Smith's The Wealth of Nations was aimed directly at this mercantilist ideology by saying free trade and specialization were the true creators of a nations' wealth, an idea which eventually won out.
Friedman generally argued(in his book Capitalism and Freedom, at least) that most monopolies were created by the government increasing compliance costs to the point where firms couldn't enter.
He did say that in some cases there were "natural" monopolies, but his view towards them wasn't particularly different from most people: he thought a regulated private company or public company was the best way to organize said industry.
NGDP is AD. But the x axis is RGDP. To see this graphically here's a little thing I made.
If you divide NGDP by P (which is the definition of real GDP) you get Y. Thus rgdp is the x axis.
> https://www.academia.edu/31824659/Categories_of_the_Fall_in_the_Rate_of_Profit
This idea was disproven in the 19th century. If you are not familiar with the criticisms of the classical system that this idea is based on, then you should become familiar with them.
I agree that it's unlikely, but it's very concerning considering the public position Citadel has taken, and that they account for over 50% of Robinhood's revenue from directing orders. Check their rule 606 and 607 disclosure:
https://robinhood.com/us/en/about/legal/
Seems like a statement was released claiming Apex Clearing is the reason RH, Webull and others aren't allowing purchases. That Robinhood was one of the first to restrict purchases despite sharing the same clearinghouse doesn't absolve them of the perception that they're unfairly favoring their corporate customers over their users.
I can think of a couple on climate change. The Climate Casino by William Nordhaus and Climate Shock by Gernot Wagner and Martin Weitzman. I haven't got to reading either yet, so unfortunately I can't provide much more than that. However, all the authors are top economists in the field. I'm sure there are other good books others may be able to recommend.
Quite simply, modern economics lacks the methodology to consider ethics. Asking an economist what's ethical sounds like the setup to a joke.
It might be worth noting though that there is quite a bit of gender based price discrimination in markets. Car insurance is a classic example, and I found this example (men's product, women's product in 30 seconds on Amazon.
Definitely. These issues would broadly fall into the categories of "urban economics" or "economic geography." This book by an urban economist is an easy read and should give you a good sense of the way economists think about these issues.
I tend to think so - welfare calculations work nicely as input into utilitarian decisionmaking, and most economists I know assume utilitarian ethics, and get mad when I suggest that maybe you could do ethics differently. That being said, I don't quite know the intellectual genealogy of economic utility - it might show up in The Worldly Philosophers, which I haven't read, though. Fwiw, Smith's 'Theory of Moral Sentiments' isn't really utilitarian, so while Mill was a philosopher and economist, there have been other dual class guys who weren't utilitarians. I'm not sure this really matters for positive economics, though; you could plug in a different objective function, or just use economics to ask how x affects y (which is the direction we're moving in anyway...) rather than trying to do welfare and GE analysis.
A Random Walk Down Wall Street is pretty good. It's a little outdated in theory (I'm not a huge believer of the efficient market hypothesis) but really solid in practical advice (buy index funds) and general overview of investing.
Michael Lewis also has a few good books, while not meant solely for educational value contain a good knowledge about how the insides of the financial world work. Big Short, Flash Boys, Liar's Poker, and Boomerang are all based largely in specific financial markets and will give you a good set of knowledge of their inner workings.
Please don't. As I discuss upthread, it's a highly misleading book. If you're looking for a history of economic thought, I have always found Heilbroner's The Worldly Philosophers to be a nice read for introductory students.
The Worldly Philosophers is a good book on the history of economic thought that would probably suit you well. It's non-technical, but an interesting read. It starts with Adam Smith and follows 150+ years of economic thought up to (and slightly beyond) JM Keynes.
The Worldly Philosophers by Robert Heilbroner is good for getting a basic overview of the most historically influential economic thinkers and their respective societal contexts. Heilbroner is (was) also a good writer and there are a lot of entertaining bits about the eccentric personalities of the likes of Smith and Keynes.
Are you looking for political economy-type information, or more focused subjects? Reading the intro chapter to a game theory textbook would help you get an idea of, say, the assumptions that underlie behavioral econ, our expectations of rational and profit/payoff-maximizing individuals and firms, etc,
You need some "big picture" stuff. Sadly, big picture, "why capitalism"-style books fell out of favor around 1989. (Guess why.)
Read:
- Friedman, Capitalism and Freedom.
- Friedman, Free to Choose.
- Galbraith, The New Industrial State.
- Galbraith, The Affluent Society.
Read both Friedman and Galbraith. You're too young to pigeonhole yourself intellectually or ideologically.
Yergin's The Commanding Heights might also be worth a peek. At least read the intro and the table of contents.
(Yes, this goes slightly against my own advice above. But these books are fairly straightforward and readable, unlike The General Theory or Capital.)
> I assume you heard about this story from The Undercover Economist Strikes Back?
I heard about this many years ago, and somehow it just popped to my mind today out of the blue. I haven't heard of The Undercover Economist before.
> giving more buying power to everyone
That makes it clear. Thanks.
> doesn't deprive others of goods and services, it deprives the people who have burned it
Ok, so there really is no reason to get upset about this on selfish grounds. You could always say that you could have used your money better, but you could say the same for any consumption.
Ironically Bitcoin has long been surpassed by other digital currencies in terms of functionality as a currency. But I won't get into that right now. As far as modeling the value, it is the same as any other good in terms of price valuation. It might be more useful to look at transaction fees to ascertain value in the utility sense. That is 'what are people wlling to pay to use bitcoin?'. When transaction (tx) demand is low, say <12,000 tx/hr, people are paying only 0.00015btc to send a tx (<$1) and get confirmed on the next block. But when demand spikes, say 16,000tx/hr for eight hours, then that is a backlog of 32,000 tx at hour 8. Then the tx fee price goes to 0.00110btc to send a tx (>$5) for the same tx to get confirmed on the next block.
Bitcoin's fee market has a price elasticity that is either nearly flat, or nearly vertical (dependent on whether tx rate is greater than tx capacity or not).
So if you want to send $5000 from Pittsburgh to Singapore in a few minutes, then bitcoin is great---a fee of $0.50 or $5 is a pretty good deal. But if you want to buy a cup of coffee in Pittsburgh from the coffeehouse you are at then Bitcoin is kind of lousy---a fee of $0.50 is steep, a fee of $5.00 is absurd.
Scaling options can improve this in the future or if you are okay with waiting a few (sometimes several) blocks then it could/is an excellent payment system. But with other currencies out there Bitcoin's price is more a reflection of the interest in the technology than the coin itself.... this is why less and less USD/EUR value is in Bitcoin---currently around 50%--- and is more and more is other coins (Ether, XMR, etc).
Total USD value of all bitcoins coins * supply is currently $98billion. Total of all major coins including bitcoin is $176 billion.
https://coinmarketcap.com/
If you don't have an approved plan you will have to pay a fee when filing your taxes. The fee is calculated using a general formula.
Even though the technology has value, I don't think that answers the question of why Bitcoin per se should have any value. The technology, as far as I know, is free for all to use (like the wheel or fire -- no patents or restrictions on usage). So while it's true that the supply of Bitcoin is limited, the supply of cryptocurrencies is unlimited (and, predictably, growing every day - https://coinmarketcap.com/).
>Time discounting, the effect of delay on expected utility, may also be subadditive. Consider someone judging the present value of an outcome to be received in one year. He or she can separately discount for each of the 12 months in the year, or discount once for the unbroken one year. Additive discounting means that the present value is independent of how the year is divided, while subadditive discounting means that the total discounting is greater when the year is divided into months.
From this paper which is paywall-blocked in its entirety but the intro is available in the link.
It's similar to compound interest, if that makes sense; think of a savings account paying 1% annually with a payment frequency of once a year versus once a month.
I would say all of your questions belong on /r/personalfinance.
I always recommend that people take a finance course that covers the basic iterations of future and present value and teaches you to read spreadsheets (for that purpose, a course in financial accounting is also extremely useful). intro macro courses teach monetary policy and stuff about govt bonds, which is also useful, because i find a lot of people don't understand the concepts of interest, inflation, and exchange rate. however, the rest of economics is either trite or unnecessarily complicated for the average user.
here's a resource: https://www.coursera.org/courses?orderby=upcoming&cats=economics
> 4) Is day trading worth looking into?
this is a question only you can answer. do you have a) money that b) you are willing to lose in c) markets that you know at least something about?
Adding written formulas in Word is a useful skill, but if you write formulas often, it may be more convenient to learn a typesetting system like LaTeX. You can find interactive TeX editors online, such as Overleaf, download an integrated environment such as TeXStudio (which is what I use for all my academic writing), or find a more barebones TeX editor.
What list are you looking at, specifically? The authors of the 2013 study invited participants from four different sources. For the Top100 group whose opinions I cited, they used a Microsoft academic search engine to identify the top 100 AI researchers by citations. I can't figure out how to get that full list (and the website/results likely changed since then), but the current top 10 (see the right sidebar here) includes researchers from Toronto and Stanford.
I'll also just note that I didn't make either of the following claims:
- "AlphaGo is...a sign that AGI is imminent"
- "AlphaGo is...the beginning of the end"
There are quite a few studies out there. For example, see this article and check out ones that cite it. https://www.researchgate.net/profile/Dawn_Thilmany/publication/23521752_Going_Local_Exploring_Consumer_Behavior_and_Motivations_for_Direct_Food_Purchases/links/53dbc0d70cf2a76fb667ad8f.pdf
Here is a textbook on monetary theory that can be taught at an advanced undergraduate course:
Modeling Monetary Economies by Bruce Champ (Author), Scott Freeman (Author), Joseph Haslag (Author)
Your reasoning is consistent with the conventional ideas about liberalization of trade and finance as well as convergence in economic development. In fact, several European and East Asian countries succeeded to grow fast and close the income differences in the past. However, most nations in the world failed to do the same. The short answer to "why nations fail" (See Acemoglu and Robinson's book) is bad institutions . Corruption is definitely an aspect of it. To illustrate the causation, think of government contracts. In a weak state, the contracts go to the businesses who have the strongest political connections and distribute a lot bribes, not the best bidder. Also, there is little scrutiny about whether the contracts serve the intended public good. The result is waste of society's resources and inefficient amount and quality of public goods (eduacation, health, infrastructure etc.).
Kolstad's book (https://www.amazon.com/Environmental-Economics-Charles-D-Kolstad/dp/0199732647) is used in many undergraduate classes. If you're looking for a great graduate text, there isn't one, just go through the top papers in JEEM and JAERE over the last few years. Also helps to pick a focus (e.g., valuation/hedonic pricing, carbon market design, etc.)
Comparing the aggregate figures might be misleading, because China is very large compared to Taiwan. There is great income disparity among the provinces of China. The developed provinces do not seem to be far behind Taiwan (see this), but many provinces are very poor. A more liberal political system might create redistribution from the developed provinces to the less developed ones, thereby reducing the domestic income differences. Would that lead to more sustainable development? I think, Acemoglu and Robinson (here) would say yes.
You:
>Yes, its not an official tax. It unofficially fulfills the same purpose.... you should look at how they finance all the covid spending, welfare, and military...... Seriously.... just look at how they printed money for the covid bills. If you think that's not adding money into the system for a government program, then god help you lol
Me:
>Across the board, we found almost no effect of government spending on inflation. For example, in our benchmark specification, we found that a 10 percent increase in government spending led to an 8 basis point decline in inflation. Moreover, the effect is not statistically different from zero.
https://www.stlouisfed.org/on-the-economy/2016/may/how-does-government-spending-affect-inflation
Also you:
>I'm convinced you're either actually a troll or incapable of acknowledging your own logical fallacies. You seem to be regurgitating textbook definitions without evaluating empirical evidence.
Yes, please, kindly fuck off. You have provided zero evidence for anything you've said. You don't read the sources I provide, either. You make incredibly basic mistakes. There is no high horse for you to be on here. The fucking audacity of a dude who thinks raising interest rates is a tool to raise inflation to tell others they don't know what they are talking about, incredible.
Read a textbook, because you clearly lack knowledge of basic principles.
Or here, maybe more appropriate.
I'd recommend The Economists Hour. Also written by a journalist and I found it to be a really interesting read.
I've never encountered a bad game theory textbook. Whatever is at your local library is probably fine. Here's one on Amazon that you can get used for under $10.
If u/TheRussianSaucer is more interested in non-academic "data science" then Matt Taddy's Business Data Science is a good option. He's a former UofC econometrics professor who was head of Econ and Data Science for Microsoft Business AI and is now at Amazon
It is not a "how to R" book, but it contains enough R background that someone who is roughly familiar can get working. He also has all of the code and examples in his github page (and links to his old teaching materials/lecture slides).
I've read a preprint version (when it was called something like Modern Business Analytics) and it was very approachable. Much more readable that Intro to Statistical Learning.
It is written by an economist, so unlike a lot of data science/machine learning books that focus heavily on prediction (or recommendations/categorization), there's a fair amount of content in this book dedicated to causal inference.
If you want an in-depth look at post-WW1 monetary policy up to WW2, I would recommend <em>Lord of Finance</em> by Liaquat Ahamed. Winner of the Pulitzer Prize in 2010, the book follows the lives of the 4 most prominent central bankers of the time (Benjamin Strong, Governor of NY Fed; Montagu Norman, Governor of the Bank of England; Emile Moreau, Governor of the Banque de France and Hjalmar Schacht, president of the Reichsbank).
It covers a little from before WW1, the issue of reparations, the German hyperinflation, the bull run of the 1920s, the Great Depression, and how the gold standard impacted all those issues. It also does cover Keynes, and some of his opinions, but not to the extent that you can read the book and understand what Keynesianism is all about.
If you have an Econ 1&2 understanding of economics, then any pop econ book which claims broadly to explain/teach..etc the concepts/principles of economics will be redundant.
In the case also much of Mankiw's textbooks will be review, but still valuable and a great reference to have.
But given you have Econ 1&2, I think you should read Capitalism and Freedom next, it's right up your alley.
I initially thought your goal was to get a better understanding of the principles of Econ. Can you refine your goal a bit? Do you want to read books that explain the economic reasoning as to why certain policies are good? C&F does exactly that.
As for the counterargument to Capitalism and Freedom, people sometimes cite Galbraith's The Affluent Society. Which you can read, but I would say 2 things:
-Despite this book's place on the reading list, it contains flawed arguments and false information. Milton Friedman wrote a short critique to this book, which I think ought to be required companion (and is even a great solo read).
-Galbraith was and is considered by academic economics to be more of a 'policy entrepreneur' than an academic economist. He was often heavy on wordplay, thin on fact.
Dixit and Nalebuff, Thinking Strategically. Popular book intended for lay audiences, but has a surprising amount of good information.
Gibbons, Game Theory for Applied Economists. Undergrad level game theory book.
If you have the math for it (three terms of calculus is good enough), I suggest skipping the intro micro books and jumping into more rigorous treatments found in books like Varian's Microeconomic Analysis. They'll cover everything that undergrad micro courses will cover but in the right order and more rigorously.
Also, you'll want Milton Friedman's Price Theory. It only covers Price Theory so it's not as broad as standard micro texts, but it's pretty intuitive and the questions in the Appendix are real economics questions, not the standard homework questions you'll find in texts like Varian's.
You might want to check out The Armchair Economist for intuition. Thinking like an economist requires counterfactual reasoning. The emphasis on counterfactuals in standard economic theory might be lost on you if the connection isn't explicitly made.
I wouldn't bother with macro or metrics.
I'd suggest Economics in One Lesson by Henry Hazlitt as a first book to dive into. He belonged to a heterodox school of economics, but this book is an excellent introduction to the general principles of economics IMO.
Principles of Economics by Greg Mankiw is the book you'll want to read to really start understanding the foundations of the discpline. If you find it too challenging you could supplement it with free economics lectures on particular topics on Youtube or Coursera.
I would strongly recommend against Economics in One Lessons for the reasons Delong describes here. It's a deceptive book for someone without prior knowledge.
looks like this accidentally got caught in the spam filter.
One good read is "The Worldly Philosophers". Definitely not too technical, and I think it's a fairly interesting narrative. Starts with Adam Smith and progresses through the big thinkers - Smith, Ricardo, Malthus, Marx, Keynes, etc.
If you're just starting out, the intro micro course is available as a MOOC on MITx as well. Should be the same material, but more recent lectures. You can register to get credit if you're into collecting a MOOC cert.
I'm taking it as review, and plan on following up with the rest of the Data, Economics, and Development Policy micromasters sequence.
https://www.edx.org/course/microeconomics-mitx-14-100x-1
Outside of that, I'd suggest reading The Undercover Economist and The Undercover Economist Strikes Back. It's very armchair oriented, but it's good for contextualizing your more academic sources.
If you'd like a primer on econometrics, Mostly Harmless Econometrics should be fairly accessible, especially if you have a basic background in stats.
I'd recommend more popular books rather than the dry texts - the better ones will make it clear where they are over-simplifying for the sake of accessibility and shouldn't lead you astray. If you study economics seriously, you're going to have a lot of maths and theory thrown at you, and at your stage, I'd suggest keeping it lighter to preserve your motivation. This is the approach that I'm taking with my 16 year old daughter. I'd recommend "The Armchair Economist" by Steve Landburg and "The Art of Strategy" by Dixit and Nalebuff. These are more on the micro side, but have the advantage of using economic tools applied to real world problems like the price of popcorn or negotiating wages. My sense was that they were balanced and politically neutral, but maybe that reflects my own innate biases. I'd also strongly recommend "Thinking: Fast and Slow" by Daniel Kahnemann. Economics is about how rational people respond to different incentives (we buy less if the price is higher, we work more if the wage is higher). Kahnemann's great insight is that we often don't act rationally, and this therefore undermines some key parts of theory. Again, very rooted in the real world. Finally, take a look at "The Economic Consequences of the Peace" by JM Keynes which lays out a lot of his ideas in a simple way, applied to the question of German war reparations at the Versailles Peace conference. It's a real historical document, quite funny in a dry way, and well written.
Great answer.
I'll also add in the book Thinking Strategically by Dixit and Nalebuff. It's a mainstream paperback book and only slightly mathy, and useful for those who have seen just a little bit of game theory but not yet a lot.
I was referring to the tendency (which is prevalent in almost every politically relevant academics' behavior, I'd imagine) to oversimplify things for political reasons; in the process, ignoring many of your more serious opinions for the sake of clarity.
Politicians like clear, ideological, agendas. So if you give them one, you can be politically relevant.
Not sure how Capitalism and Freedom fits into this. It's a politically motivated book, but I haven't read it - nor have I read more than a little Friedman overall. But if you want to know Friedman the economist, you have to read his academic stuff. There's just no substitute for that.
The intelligent investor/When Genius Failed are not that economicsy more finance related.
Krugman who wrote End this Depression Now and The Return of Depression Economics is an articulate nobel-prize winning economist. They are good books to read though there is a joke about Krugman that he was broken by the G.W.Bush administration as he often strays quite far into politics when criticizing repbulicans but the econ is solid.
If by the general theory you mean keynes', I would recommend against it as it isn't the most readable book and there have been major contributions to the topics it covers since it was written.
I wouldn't recommend Keynes the Return of the Master or 23 Things They Don't Tell You About Capitalism. Read Skidelsky's biographies of keynes instead, he is a better historian than economist. As for 23 Things They Don't Tell You About Capitalism, Ha Joon Chang has a history of somewhat misrepresenting mainstream econ and you should probably get a better grounding in economics before approaching the debates that Ha Joon Chang is involved in.
Predictably Irrational, if you are interested in behavioral economics you should probably read this first. It should be easy to read as well being interesting and applied.
I don't know about the others.
The books in the list are mostly either left wing or right wing. There's a bunch of quite hardcore Keynesian books and a hardcore anti-Keynesian book (Economics in One Lesson).
If you do read some of these books, I think it would be worth balancing them out with something less political, like a general economics textbook.
(Unlike Cross_Keynesian I quite like "Economics in One Lesson", though I don't agree with lots of it).
There's the reading list on the sidebar of /r/Economics.
There's the standard response from every member of BE of The Undercover Economist and The Undercover Economist Strikes Back by Tim Harford.
There's my personal favorite economics book, Peddling Prosperity by Paul Krugman.
And specific to growth, there's The Elusive Quest for Growth by William Easterly, which I haven't finished but gets great reviews from economists.
See here. You can get the PDF from the top right corner.
They merely set up an ideal regression, equation 3.2.13 which states:
> Yi= b0 + b1(schooling) + b2(Innate Ability) + u
However, they note that data on such "innate availability" is not available. To substitute for that, they proxy it using a variable called "late ability." I quote:
>Equation (3.2.13) is the regression of interest, but unfortunately, data on ai are unavailable. However, you have a second ability measure collected later, after schooling is completed (say, the score on a test used to screen job applicants). Call this variable "late ability," ali. In general, schooling increases late ability relative to innate ability.
Then, you can set up a scenario where such "late" ability is a function of both schooling and innate ability, equation 3.2.14:
>Late Ability= b0 + b1(schooling) +b2(innate ability) + U
They then diffrentiate "Bad controls" from "proxy controls"
>There is an interesting ambiguity in the proxy-control story that is not present in the first bad-control story. Control for outcome variables is simply misguided; you do not want to control for occupation in a schooling regression if the regression is to have a causal interpretation. In the proxy-control scenario, however, your intentions are good. And while proxy control does not generate the regression coefficient of interest, it may be an improvement on no control at all
They also note that that regression run with the proxy control might be closer to the "true" estimate because late-ability does capture some innate ability and that the "true" estimate might be somewhere in the middle.
If you want a math heavy, theoretical look, then there is
1) Herve Moulin Game Theory for the Social Sciences
along with the answers in
2) Exercises with answers from Herve Moulin's Game Theory...
> ... most people think they're middle class, regardless of where they are in the income distribution.
Yep. There's a great book about this by a professor of sociology who interviewed dozens of families at various levels of income and net worth. Basically everyone calls themselves middle class. The book is Uneasy Street: The Anxieties of Affluence.
Long story short: terms like "poor", "middle class", and "rich" all carry a lot of emotional and political baggage. And among those terms, people feel "middle class" carries the most esteem or dignity, everyone massages the definition so that "middle class" includes themselves.
I like Jon Gruber's Public Economics textbook (usually you should buy the second newest edition so it is cheaper). He was my PhD advisor so I may find it especially clear because it matches how I learned the material.
Economists don't have formal agreed definitions of what makes for a socialist or communist economy. Generally economists have given up on attempting to classify economies that way: every real world economy is a mixed economy. On top of that, the terms "socialism" and "communism" are highly politicised and using them tends to get one bogged down in unresolvable definitional arguments.
That said, the idea of a market economy with significant redistribution via taxes reminds me of the policies of NZ's Roger Douglas, which I'd have thought few socialists would have described as "socialist". And, the USSR was the Union of Soviet Socialist Republics, but they pursued very different policies to Rogernomics.
But those customs and people need to be created anew with each generation. So those customs won't last, unless someone or something makes them last. I read that in this book. https://www.amazon.com/Social-Origins-Dictatorship-Democracy-Peasant/dp/0807050733
> but power over the lives of the poor through disproportionate control over political policy, infrastructure, media, ect.
I used to believe this until I read Politics is for Power. It's just not born out in reality that these billionaires have anywhere near the power people think they do. Money doesn't buy votes. We saw that in the 2020 democratic primaries.
In the same way there is a diminishing returns for each movie ticket bought by an individual (I assume you've heard this classic analogy), the same is true for money and power. It's why I'm okay with progressive tax policies. That extra 1 million dollars after the first million is not as impactful as a million dollars for a poor person.
We as individuals could become more powerful than any multimillionaire in our local politics if we were willing to dedicate our time over decades. A couple dozen of us could become more powerful than any billionaire. It's really a dedication thing to move away from political hobbyism and instead towards boring but effective actions.
But who knows, maybe you have something to back up your position that money does buy power and doesn't have a significant diminishing returns. I'd love to read about it.
Are you prepping for the undergrad level or the graduate level?
Simon and Blume is the go-to for grad school prep.
For undergrad prep I'd just pick up any old calculus text and do some practice problems, or use something like Khan academy for calc.
Most other recommendations are more fun, but if you are into statistics (or already know some economics), I'd recommend Mostly Harmless Econometrics. They do a really good job of combining intuitition with technical methods. It is also the only fun-to-read methodology book I have ever read.
"There's money leaving the market from people who were convinced that the rally has been mostly attributable to the Fed, and the rise on the 10-year yield is a concern since it happened so quickly," he said. "It's too early to say whether this represents a buying opportunity or if the weakness will continue." (David Joy, chief market strategist at Ameriprise Financial)
I assume there were many more sell orders than buy orders. Is this money just going to sit on the sidelines? I notice banks are buying more homes. It sounds like a conspiracy theory scenario.
"Today (6/21/2013) "About 9.29 billion shares changed hands on the New York Stock Exchange, the Nasdaq and NYSE MKT, above the daily average so far this year of about 6.36 billion shares."
and..."More than $19 billion left funds investing in developing-nation assets in the three weeks to June 12,"
I think /u/OxfordCommaLoyalist is right: you can have perfectly competitive labor and goods market and still have a worker co-op produce less output. Here's an example, red is the profit function, purple's profit per worker, blue is marginal revenue, green is marginal cost. Price and wage are parametric, set at 5 and 1.
Total profit is maximized where MC=MR, but profit/worker is maximized before that point.
- That is the GDP formula.
- Aggregate demand and aggregate demand are functions - they are a set of points in (Y, p) space. They are not a single point.
- That being said, I think it makes sense to say that AD is NGDP. The reason is that along any particular point in an AD curve, NGDP will be constant. AD will only shift when NGDP changes. So in that sense AD is NGDP
- The x axis is real GDP. The y axis is the price level. We can empirically observe both of these things and give them numbers.
I personally like to recommend this book: Naked Economics
I should probably petition for it to be on the official reading list. It is part of the undergrad introductory course at the University of Chicago (which is probably most prestigious economics program). It is an easy read and has been updated with new additions several times.
The problem with The Armchair Economist and The Undercover Economist from the reading list is that they are a little bit outdated. Its not that stuff in them is wrong, but its harder to relate to the examples they use, and its often awkward when books/textbooks were written before the Financial Crisis because it has had such a huge effect on certain facets of economics.
You might notice that last point yourself as when study finance. I had a corp fin professor who let us use old versions of the textbook (gave the pages/problem numbers for the last 4 editions)...but man, reading that book was sometimes weird since the examples were so out of touch with current reality. The theory was unchanged, but damn did the repercussions of the financial crisis change the way certain things are talked about (for instance, the risk free rate made a much bigger difference in your calculations back when 5%+ was normal vs near zero for the last decade).
>Rent-seeking is collecting wealth, without creating new wealth.
Isn't there more to it than that? Don't people have to leverage some connection not generally available (primarily government granted monopoly) in order to receive above market returns? See this little paper by Tullock going over the origins of the concept by Anne Krueger and himself.
Scalping seems to fit into the role of arbitrage more than rent seeking: Buying at market price in one market and selling at market price in another, higher priced market. In the case of scalping, the lower priced market is the primary market with artificially constrained prices and the higher priced is the secondary market where price equals demand. There are plenty of reasons producers want to constrain prices in the primary market: Some musicians prefer to have people who are excited to be there, therefore willing to camp out in order to get a ticket, over people who will just sit passively is a classic example. Console sellers have, at times, sold consoles at a loss in order to profit on higher margin game sales is another. We don't generally privilege producers allocative preferences because they aren't generally efficient, even in cases where they're selling at below market prices.
So, unless scalpers are taking advantage of some program from the manufacturer that allows them to buy sooner or cheaper than the rest of the market for the purposes of reselling, they're practicing arbitrage rather than rent seeking. At least according to the Krueger and Tullock's definition.
Interesting. I did not realize I was incorrect. Here is a good explanation https://www.masterclass.com/articles/theory-vs-law-basics-of-the-scientific-method#scientific-theory-vs-law-whats-the-difference
I always thought whether or not something is descriptive or explanatory deals with how well it reflects reality. A law is indisputably correct. A theory was more hypothetical. A law has consensus in the scientific community. A theory has a much better chance of being disproven. This isn't correct?
uh yes i do actually lmao. it was part of a project i was attempting to do a long time ago but i could never get it to work properly. i was trying to show that you can't rebate 100% of pigovian tax revenue or else the income effect will cause an increase in the consumption of dirty goods. i gave up cuz i couldnt make the math work but i mean i can try to get rid of the complicated stuff
I thought about this a bit more, in a demand curve thats a straight line elasticity would decrease as you move up. Consider the following demand curve:
P = 1 - q
The equation for price elasticity of demand is:
PED = \frac{\partial ln(P)}{\partial ln(q)}
or you could use the midpoint formula but that's just an approximation.
For the PED of this particular demand function, you can do some calculus:
\frac{\partial ln(P)}{\partial q} = \frac{-1}{1-q} \
q = 1 - P \
\frac{\partial ln(q)}{\partial P} = \frac{-1}{1-P} \
\frac{\partial ln(q)}{\partial ln(P)} = \frac{1 - q}{1 - P} \
So throwing all that into a desmos graph youll get this.
so you actually are correct, in a demand curve with a straight line elasticity will increase as you move upwards. In a demand curve thats like this:
P = \frac{1}{q}
the demand curve will always be unit elastic. idk if that helps but you can sorta visualize the y = \frac{1}{x} cruve as your reference frame for unit elasticity if that makes sense.
Here is an informative article. It should be noted it is rare for a CEO to get majority stock in a company unless it was part of the deal of his becoming CEO or he founded it.
That's a very slick rhetorical move, "I at least am not a/an Xian" (where X is whatever unverifiable "body of knowledge" you've come up with). Freud said exactly the same thing, and he too has been relegated to Literature departments by now (Marx too has found his most cozy academic home in English and Art departments):
​
https://www.amazon.com/Freud-Making-Illusion-Frederick-Crews-ebook/dp/B01NAYNITF
In general, consumers will experience price increases when a country's exchange rate depreciates. This is due to imported inflation, which occurs whenever foreign prices increase for the goods that are imported, or when the country's exchange rate depreciates.
However, regardless of what the US government claims, China's currency has not significantly depreciated in the past few years. They hold the nominal value of the yuan constant against a basket of currencies, this can lead to fluctuations vs any single currency, but these fluctuations will tend to cancel out over time. To illustrate, have a look at this graph of the RMB exchange rate vs the Euro.
You can't just withdraw money from a Roth Ira whenever you want. There are a ton of rules.
I'm pretty sure you lose the tax benefits of the Roth IRA if you withdraw more than your principal contribution which kinda defeats the purpose of the Roth IRA.
It seems plausible that chance events would affect the development of wealth inequality. But I agree with u/monsieurY that treating objects as having a single, inherent value, and a person willing to pay more or less than that value is making a mistake, does not make much sense -- different people can have different preferences, and thus disagree on the value of a good without anyone being objectively wrong.
It may be thought-provoking, but I'd discourage taking it too literally. (The same works for plenty of economic models, but I'd say it even more strongly here.)
(Incidentally, you can find the papers here and here, in case you're out of page views at Scientific American.)
Yes! Dan Ariely (dual PhDs in Psych and Econ, what a freaking stud!) also explores this in Predictably Irrational, among other writings, TED talks etc.
Chapter 4, "The Cost of Social Norms: Why We Are Happy to Do Things, but Not When We Are Paid to Do Them" addresses this most specifically.
IIRC he uses the example of a wagon owner who's glad to give a ride to a neighbor in need, but will refuse to do so for a small sum even though he'd have done it for free.
Yes, the stimulus measures, including the CARES act, exceeded the income losses by a substantial amount.
I really can't believe I had to dig out my Macro 1 textbook to explain the basic definition of money to the armchair economists of r/AskEconomics. But, once again, here we are.
>A traditional view of money is that it has three important functions. Namely, money is a medium of exchange, it is a store of value, and it is a unit of account. Money is a medium of exchange in that it is accepted in exchange for goods for the sole reason that it can in turn be traded for other goods, not because it is wanted for consumption purposes. Money is a store of value, like other assets such as stocks, bonds, housing, and so on, as it allows consumers to trade current goods for future goods. Finally, money is a unit of account because essentially all contracts are denominated in terms of money.
Macroeconomics, 6th Edition by Stephen D. Williamson.
Since you can do all of the above with cryptocurrencies, they are by definition considered money.
The verifiable scarcity aspect of crypto is important in defining the value of a digital asset as opposed to a physical asset. Since you can simply look at gold, a paper dollar or rare natural materials to verify their existence, you need something special to do this with an asset that is intrinsically no more than a amalgamation of code.