Ask MetaFilter questions tagged with economics

Spend or Save?

woodblock100 — Sun, 27 Dec 2009 16:17:42 -0800

With hundreds of years of accumulated data on how economies 'work' available for analysis, how is it possible that it is still unclear (it seems) whether or not - and to what extent - a government should boost an economy that is in a slowdown? There is an op/ed piece in my newspaper this morning (The Japan Times) which argues that Japan is in a downward spiral (partially) due to government policy: to reduce deficits, government reduces spending, which depresses the economy, reducing taxes, thus increasing deficits, etc. and etc. The writer makes the argument (compelling to a non-economist like myself) that massive spending on the part of government would get things moving again, and that the resulting massive deficits would soon be covered by increased tax revenue.

There are of course plenty of experts who argue the reverse, that such a level of deficit would be harmful (inflationary spiral, etc. etc.).

But surely by now - after hundreds of years of experience at trying different methods of 'moving' an economy this way or that - isn't there enough data to show which way to go? My question isn't to ask you to argue one side or the other, but to ask: why isn't the answer clear by now?

"Sweatshops"?

ebesan — Sat, 19 Dec 2009 09:02:56 -0800

"Sweatshops"? Overseas labor. looking for pros and cons; discussion on how to define/evaluate whether work done overseas is beneficial or harmful for the workers and country involved. 1. What is the point below which people are harmed? How is this arrived at, and what factors are included? (wages, hours, conditions, benefits)
2. Are there organizations that monitor these issues? How to find companies that voluntarily submit to examination?

What was the economic impact of separate-but-equal?

kirkaracha — Fri, 11 Dec 2009 09:50:58 -0800

What was the economic impact of Jim Crow? During the Jim Crow days, there were "separate but equal" facilities for blacks and whites. Was building two sets of water fountains, bathrooms, lunch counters, etc. economically beneficial or harmful?

I'm wondering if people's bigotry caused them to act in ways that were economically harmful to themselves. Also, I put "separate but equal" in quotes because I suspect that the facilities for black people were inferior to those for white people. Was that the case?

I lost my chart!

aburd — Wed, 09 Dec 2009 20:00:09 -0800

I used to have a really nice chart showing the growth of the US GDP from the early 1800s through now. I think it was a Fed chart with the recession eras shaded. Can anyone help me find this?

What happens if nobody can pay anybody back?

Geppp — Tue, 08 Dec 2009 12:31:12 -0800

What if all the major world economies defaulted on their external debts at once? Out of curiosity, what if all the large major world economies (say, the economies comprising of 90% of the world's GDP) suddenly defaulted on their external debts (presumably, to each other)? What if they became insolvent? What if every country in the world defaulted and/or became insolvent? Is it even possible?

Thanks in advance for satisfying my curiosity.

What's better for the environment: mailed physical CD for £6, or digital download for £7?

mstillwell — Mon, 30 Nov 2009 17:09:14 -0800

Is it better, environmentally speaking, to buy a physical CD for £6 and have it mailed to me, or to buy a digital copy for £7? Some of the £6 goes toward manufacturing the CD and transporting it, but the £7 I give to the digital music store pays the wages of their employees, who in turn buy stuff. (Their equipment, rent, etc. gets turned into stuff in the same way.) What if the numbers were £6 physical CD, £12 digital?

In other words, to what extent does raw price (i.e. a proxy for the amount of stuff that your purchase allows other people to buy) matter? If I buy £100,000 of environmentally-friendly stuff, isn't that (approximately) £100,000 of (potentially not environmentally-friendly) stuff that other people can then afford to buy?

If I buy a Prius hoping to help the environment, does it matter how Toyota's employees and suppliers spend their money? Are there any substantive differences across industries, or is a dollar for Toyota more or less equivalent to a dollar for McDonald's?

Don't buy my product!

ecorrocio — Wed, 11 Nov 2009 08:08:11 -0800

Why is my energy company asking me to cut back on energy use? The grocery store doesn't try to get me to buy less food. The gas station doesn't try to help me get better mileage. Just wondering: Our 7-state energy company has numerous campaigns advising customers on using less energy. How to save energy. How to save money. And yet... it's a private, for-profit business. Essentially they are advising me on how not to purchase their product.

We're not having brownouts or any sort of energy shortage. So I would think they're not overburdened...? Like a bakery advising you on how to eat less bread, save money on bread etc.

What are the political/economic/market reasons for this?

Public, please help me determine a gradual, economical policy for my life.

ropeladder — Tue, 03 Nov 2009 08:37:56 -0800

Considering grad school for public policy, economics, international development. Help me sort out my life. Note: my situation is pretty similar to this post. (I did a double take when I read it to make sure I hadn't posted this question already myself)

I just got back from teaching English for two years in the Peace Corps and suddenly everyone I know seems to be in grad school and loving it. I like learning and am pretty passionate about social science. I've been looking around at masters degrees in public policy and economics (possibly with an international slant, mostly because I'd be more qualified for it having done Peace Corps) and am considering masters programs in the following:

-Public Policy (or International PP) with econ focus
-Public Policy + Economics (dual degree)
-(plain old) Economics
-International Public Policy with econ focus
-International Studies with a development focus
-Public Administration + Economics (dual degree)
-(The other option is just to move back to DC and look for another nonprofit job.)

I don't have any formal background in economics (like the referenced post, I'm mostly a dilettante at this stage), so it's likely that I will be taking undergrad classes (econ and maybe stats) next spring in preparation for any of the programs. My BA was in German with a minor in Politics. Political orientation is leftward and making lots of money is not very important.

I have two major concerns. The first is that I want a solid grasp of both neoclassical economics and some of the major heterodox critiques. Ideally I would like a solid econ program that is grounded within a broader social science context. Public policy seems like it would be a good place for this, but I'm not really sure.

The second concern is that I don't really know what I want the degree for, career-wise. At this point I have no desire to continue on with a PhD and/or go into academia (I want to do some more things first...), and sitting in a think tank doesn't appeal to me very strongly either. Besides working for the gov'mint, what other kinds of jobs are there that this kind of degree would be conducive to getting? I'm concerned that my passion for a topic will not sustain a dull desk job.

Those of you that have done similar programs, where have you ended up and what are your jobs like? What kinds of programs seem like they would best fit what I'm looking for? Economists (and others), are you going to take me seriously if I don't have a specifically econ degree? Is more advanced economics helpful in the real world anyway?

Huge thanks in advance.

What Does The Word SLACKER Mean To You?

Lipstick Thespian — Sun, 01 Nov 2009 13:18:39 -0800

Do-Gooder Needs Help With Amusing Slackronym! I am thinking of starting a website that would feature local people in Northern New England who have valuable job skills or passions that are lying dormant because of the economic downturn.

I want to entitle it SLACKER.com or something similar, but am having trouble aligning a SLACKER acronym (slackronym?) with it.

Ideally the Slackronym should embody the following:
- underused, valuable local resources.
- a commitment to making the world a better place through your passions.
- the idea that enormous possibilities are going unnoticed in our communities because no one is hearing about what people can offer.

Any creative, witty or sarcastic help with fitting words into a SLACKER acronym would be great. Bonus points for turning the whole "GET A JOB, ASSHOLE!" rhetoric on its ear that the far-right wingnut Tea Party folks use.

The economics of classical entertainment

kandinski — Thu, 29 Oct 2009 14:41:51 -0800

Did ancient greeks pay for their tickets to the theatre? The Romans for their seats at the Circus? How was the Greek theatre funded? How were authors and players paid?

Deflated by inflation

Anonymous — Mon, 26 Oct 2009 14:05:50 -0800

[Economics101Filter] How is it that the cost of living can go up, but salaries stay the same? Economics n00b questions inside. I've been away from the States for about 10 years. I come back, and am naturally shocked by how much more expensive everything has become. (FWIW, I live in NYC.) For instance, a diner meal for me was always under $10; now, breakfast is easily $15.

I was lucky enough to be able to land a job right away in my old sector. I was shocked a second time when I saw that salaries, as well as vendor costs, have stayed _exactly_ the same. (E.g., the average project/account manager's salary is around 50K - precisely the level I was at as a 3-year "veteran" when I left 10 yrs ago.)

Question: how does this work, exactly? Are people just living shittier lives? Eating out less (but this is New York!) Is this true across different sectors? Or is it just endemic to my sector? Will it eventually balance out? Is it just a sign of the times? Please enlighten this economics n00b!

(Anonymous because I feel too stupid asking these questions, and also because I don't want to announce my salary level to the entire world.)

Understanding cricket

jfwlucy — Mon, 19 Oct 2009 10:59:18 -0800

Trying to understand issues around cricket as compared to baseball -- player drafting, financing, culture/conduct, etc. -- hoping an enthusiast can help me. Okay, I've been searching for a while (Wikipedia, Dangermouse, and ABCs of Cricket), and I think I get the basics, but I still have a few unanswered questions.

1) How do drafting/contracts/free agency work? How important are statistics in determining the value of a player to a particular team and does the previous year's performance of a team help determine the availability of their draft picks? Is this similar in each country?

1ai) According to Wikipedia, most of the financing behind cricket is international? So then does a nation pay for fielding its cricket team or does most of the money come from private backing?

1bii) What role does nationalism play? Are there rules or merely customs that limit the number of foreign players on each team?

2) I understand this diagram mostly, but what if I were batting and I did a quick 180 degree turn and popped up the ball right behind me OVER the stumps and past the long stop player? Illegal? Based on the position of my feet or the rules?

3) Wickets and bails. Do they ever get tampered with? Hidden magnets? Glue? Who checks?

4) I understand distractions by fielders (except "sledging") are discouraged. What about fan distractions? How rigidly is this enforced?

4a) What about unnecessary roughness in tagging the batter? Depends on the team and the venue?

Thanks so much for your help.

Is there anything that conservatives think WON'T benefit from the market?

jnnla — Sun, 13 Sep 2009 00:14:50 -0800

Examples of anything that conservatives DON'T think would benefit from the free market? In the current US healthcare debate, many argue that healthcare should not be subject to free market capitalism, but should instead rely on a single payer system. Conservatives argue that the free market is the best allocator of resources, and is therefore the best way to approach healthcare for Americans.

This is obviously an oversimplification and only one facet of the debate, but it got me to thinking.

Is there anything that exists that conservatives DO NOT THINK would benefit from free market principles?

Are there examples out there of services that conservatives agree should not be subject to the market or do they believe anything and everything should be left to the unregulated free market and driven by market incentives?

I am not well versed in economic theory so please speak to me in terms a child could understand.

USDA-Grade School?

downing street memo — Tue, 25 Aug 2009 10:47:33 -0800

Does anyone have any experience with the USDA Graduate School in DC? Is this an acceptable place to do prerequisites for graduate programs? I'm interested in doing a graduate program in either public policy or economics (an MA to start, and likely a PhD after), and either one will likely require calculus and up to intermediate macro and micro for admission. I was a history major and didn't take any econ, and my calculus grade could stand some improvement. Plus, I've been out of school a few years, and I need academic recommenders.

Is the USDA grad school a good solution to get these prereqs out of the way? It's amazingly inexpensive, a short metro ride from my apartment and it almost seems too good to be true. I'd rather not schlep out to Fairfax and go to GMU if I can avoid it.

Economics 101

thesailor — Thu, 20 Aug 2009 10:10:58 -0800

What is the difference between spending and consuming? And what is the meaning of "luxury goods"? I'm reading a very insightful book called In the Jaws of the Dragon by Eamonn Fingleton, basically about how Western leaders are idiots and that China is set to take over the world. The author talks about how significant East Asian savings will become, comparing it to the Age of Discovery. Then he goes onto say how East Asians are forced to save by their governments through clever policy which "suppresses consumption" but I'm having trouble comprehending the explanation. He writes:

"...there are several ways consumption can be suppressed. Sometimes the increased saving arises in the household sector, sometimes in the business sector. In the latter case often this occurs when artificially induced shortages of luxury goods generate huge profits for oligopolistic local suppliers. Provided such profits are reinvested, they count as part of the national savings rate. This helps explain the paradox that while the macroeconomic data indicate that East Asians under-consume, Western news media often run stories about big-spending East Asian shoppers who think nothing of paying exorbitant prices - far higher than in the West - for Louis Vuitton handbags or Rolex watches. The key point is that while it is easy in East Asia to spend (because prices of luxuries are so high), it is difficult to consume (because big spenders get so little for their money). The larger economic point is that suppressed consumption creates savings somewhere. Exactly where is secondary."

1) I don't think I understand the true meanings of "spending", "consuming", and "luxury goods", which leads to the questions:
2) Why is it easy to spend because prices of luxuries are so high? What is the relationship between "easy to spend" and "high prices of luxuries"?
3) When he says "it's difficult to consume because big spenders get so little for their money, does he mean that "consuming" means spending money on luxury goods?

Many thanks for you help!

Economics articles on fundamental vs. speculative demand?

shivohum — Thu, 02 Jul 2009 22:57:54 -0800

Are there good articles/books that explain in detail the economics concept of fundamental demand vs. speculative demand, and how one might distinguish one from the other? What is the basis of this distinction in the economics literature and which famous economists, living or dead, talk about it (and in which of their works)?

Time to gut airline pricing.

paultopia — Wed, 01 Jul 2009 20:31:24 -0800

Arline prices: a specific question (Italy, late September, how to minimize cost?). And a general (airline econ 101). I'm flying from the SF Bay Area to to Milan in late September. How on earth do I minimize my cost on this? Particularly, when do I buy? The fares seem to fluctuate wildly from day to day, with almost a hundred dollar swing in the lowest price in a single day recently. And, based on previous experience, not always upward either -- sometimes they go down, or sales crop up. So I feel like there should be some smarter strategy than just "buy as early as possible."

And, generally: can someone explain to me the economic reasons behind airline pricing? It seems almost impossibly random from day-to-day, airline-to-airline, source-to-source -- far more random than any other competitive industry I can think of. I can understand how if they dealt in extreme commodities like stock, gold, or oil, these fluctuations can happen (and I suppose some of it may be tied to fuel prices). But I can't come up with a theory for this happening in an ordinary service industry.

I'm curious about this in two ways: first, out of general econ-wonk interest. The airline industry seem too competitive for the simple paranoid explanation -- that they randomize prices in order to extract more surplus from consumers -- to work, because randomized prices are basically the same as increased prices and shouldn't be sustainable under heavy competition.

Second, to make buying airline tickets feel less like a gamble! If I wanted to gamble with my money, I'd go to Vegas (preferably not by plane). I don't.

This question may be beyond even mefi... I kind of wonder if anyone has ever just put a crapload of airline pricing data into a stats program with things like calendar date, fuel price, weather, destination, etc., and just thrown regressions at it until it says "ow." If not, perhaps I will one day. But first, I turn to you.

Economics' greatest hits? ... or... Where's the science in economics?

zaebiz — Tue, 23 Jun 2009 12:54:37 -0800

As a former scientist, help me gain some faith in economics. What were the great successes of economics as a tool for making better decisions in the last 100 years? The Queen of England said it best for me : Why did none of the big shot economists see this crisis coming?

Having been scientifically trained, I have always had this belief that economics is a mostly mathematical rationalisation of events after-the-fact with the same predictive capabilities as astrology and whose validity decreases as more people believe in it. Why am I wrong? what demonstrable uses has it had? Also interested in any books or papers discussing either side of this debate.

Theory and Practice Agree in Theory but not in Practice

jasonhong — Wed, 17 Jun 2009 10:58:01 -0800

In what cases is game theory a good model of actual human behavior? I'm curious as to the extent that game theory has been empirically validated as being a good model of human behavior, in terms of theories and domains. If you know of any specific theories or domains that have been validated, or any good survey papers or introductory material, I'd really appreciate it.

For example, (I'm making these next statements up) "game theory turns out to be surprisingly effective for modeling dating behavior among high school students" or "the predicted results of Prisoner's Dilemma based on game theory highly correlates with our user studies".

I'm familiar with the basics of game theory (minimax, nash equilibria) and basics of behavioral economics (the ultimatum game, Kahneman and Tversky's Prospect Theory,
The Paradox of Choice, some of George Loewenstein's work).

economics masters online learning

gibbsjd77 — Thu, 11 Jun 2009 18:00:36 -0800

Do you know any accredited post graduate program in economics that is offered completely online? I am finishing my undergraduate through distance learning and am very interested in economics. I would like to get my MA but due to my work/life schedule attending at a campus is not feasible. I have been unable to find any, but am optimistic that the filter can help me out. Thanks for your time.

Did Keynes really say this?

CCBC — Wed, 20 May 2009 14:00:08 -0800

Did Keynes really say, "Capitalism is the astounding belief that the most wickedest of men will do the most wickedest of things for the greatest good of everyone."? This is really two questions: did he actually say "most wickedest"? Did he actually say anything like this and, if so, where?
I find it hard to believe that Lord Keynes could say anything so ungrammatical, but "most wickedest" is far more common on the Net than "most wicked". And Noam Chomsky calls this a "purported" quote. I'm scanning Galbraith now because I'm pretty certain he uses the quote somewhere, but haven't found it yet.

Where do I find historic economic data?

selenized — Thu, 14 May 2009 14:37:46 -0800

Is there some database of historical market prices for commodities? As in, if I wanted to know the average market price for a tonne of salt petre in 1835 where would I look?

Best general books on how the world works?

shivohum — Tue, 12 May 2009 19:57:00 -0800

What are the best "grand theory" books and essays purporting to explain generally how the world works - at the macro, economic/political/historical/sociological/foreign policy scale - written in or after the 20th century?

Atlas Scowled Mightily

killdevil — Mon, 11 May 2009 15:06:31 -0800

What single book presents the most forceful argument against both Randian Objectivism and the libertarian political philosophy that presents itself (in some ways, at least) as having followed naturally from Rand's ideas? A friend of mine has just soldiered his way through Atlas Shrugged and would like to read something else as a counterpoint to Rand. Somewhat offhandedly, he mentioned the Communist Manifesto, but I don't think that's particularly apt. Ideas?

College-level economics competitions?

BusyBusyBusy — Wed, 06 May 2009 08:25:04 -0800

The Federal Reserve just ended its College Federal Reserve Challenge Competition, which I have always enjoyed competing in. What other economics, public policy, or problem solving collegiate-level competitions can you recommend? I would like to keep my current group of team members, but simply switch organizations. Special points for organized competitions that are team work intensive, national, and are related to economics, monetary policy, or public speaking. Please no business plan or case competitions. Thanks, MeFites!