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Hello! I am an undergraduate applied economics student majoring in financial economics in the Philippines, preparing to undertake my thesis for my program. However, I am primarily interested in development economics, particularly on topics like comparative advantage, export basket complexity development, and growth theory in general. I've been thinking on examining the impact of new financial consumer protection policies in the Philippines, however, we realized there may come some problems with getting the data.

My advisors have informed me that our theses need not strictly be about finance, but it remains important that it be, at the very least, tangentially finance-related. I'm hitting a wall right now, so I was hoping if anyone could help me think of interesting topics that are at least somehow related to finance (and economics, obviously).

Would that country suddenly be rich? (Or a lot richer?). What would happen to the global economy? Alternatively, how much gold would need to be discovered to have a meaningful effect on the global economy? Would the effects be different if more countries still used a gold standard?

A friend of mine claimed that national debt in the U.S. means nothing and that the nation's currency is based on nothing, making the government infinitely rich and perfectly capable of doing anything (like solving homelessness and providing free healthcare and education) at no loss since it's currency is potentially infinite within the country. He claimed the dollar is no longer based on anything tangible like the gold standard and that the material value of the dollar is arbitrary, meaning the government could make infinite money with no inflation if it wanted to.

I am definitely no economist (and neither is he), but that doesn't sound right to me.

I DO NOT want to get into any politics here, only ask if anyone can explain this to me and possibly point to good resources to learn more about this.

On a basic theoretical level, inflation is caused by an over-supply of money that isn’t balanced by real growth. However, the money had to come from somewhere — generally from businesses and individuals who borrow on credit, thus adding money into the economy. To curb inflation, we raise interest rates, making borrowing less attractive. However, that also makes spending less attractive and raises unemployment. The average consumer gets squeezed, demand drops and prices drop. (This is ignoring noise in the economy like shortages of particular goods, geopolitical or other external forces on an economy, etc).

So my question is this: instead of raising interest rates, why don't we target the individuals and businesses that cause the inflation -- companies who borrow for stock buybacks, individuals who borrow for flipping a house, etc -- these endeavors that don't actually produce wealth? After all, borrowing isn't bad when it's used for real wealth creation. Why do we need to make borrowing less attractive for everyone in an economy, when we could only prevent borrowing for problematic purposes and reallocate their profits to society at large? That way we could balance out the impacts of inflation on the average consumer without slowing down the economy.

What are your thoughts? Am I misunderstanding something here? Thanks!

I think most people with a passing familiarity with the austrian school or centrally planned economies have heard of the ECP.

What intrigues me is, what are some non-austrian critiques of soviet style centrally planned economies? Some lesser known ones? I've heard Polanyi (or maybe it was Kelecki, i'm not sure) had some interesting critiques on the specifics of the soviet system, but I haven't actually been able to find them, and would love to read them. Are they in The Great Transformation? How about some other economists? What are some non-austrian school or lesser known critiques of centrally planned economies. I'd particularly love to read some from economists from eastern bloc countries.

Thanks!

So I wanted to check to make sure I correctly understand the main problem. This is my attempt to explain it, and if you can see I am misunderstanding something, please correct me, I'd love to learn!

Ok, so with that said, here we go:

The basic problem is that you lack information. If I am a central planner and I have the choice of putting a factory at location A or location B, how do I determine which location is better suited? Prices reflect the laws of supply and demand, if a particular location is needed for something the price of using that location will rise. This, in turn, means that the individuals seeking to use that location will have to recalculate their benefits. The price will continue rising until people start bowing out because the price is too high compared to their benefit. Only the person who wants it the most will pay the most and therefore the price system works by sorting who wants goods the most, and it forces honest answers out of them. You can apply this to capital or labor as well (if I'm not mistaken, within the neoclassical schema labor is seen as perfectly elastic, so a change in wage leads to a big change in supply). Another way of describing this process is that whoever is willing to bear the greatest opportunity cost (the money spent on using capital or land could've been spent on something else) gets said factor of production.

However, without prices, you need some other mechanism for determining who uses what capital, land, and labor when and where. And you need to ensure that this information is constantly up to date and constantly honest. And there's no real way to do that effectively. Computers can perhaps improve this process, but then you need to figure out how people are balancing their needs/wants with the labor supply available.

Not only this, but you also don't really have an effective way of comparing two different methods of production without prices. Like, is it better to put railtracks through the mountain or around them? Well, you need x tons of dynamite to go through the mountain, but how much is that dynamite need elsewhere? or the chemicals that go into that dynamite, or the labor that goes into producing them? It quickly spirals out of control with a huge amount of questions and information that needs answering. And that's only for two options. Imagine a third option, like a different type of explosive, and then scale this up to running an entire economy.

Is this a more or less accurate description of the traditional austrian critique of centralized planning?

In the same way Destiny does in his streams sometimes. The only one I know who does this is Unlearning Economics.

Asking in order to learn how to investigate. Thanks.

Hi I was wondering if a central bank with capital controls could theoretically peg its currency to two different currencies. Thank you!

The Econoist.com has an article that's titled: "How strong is India’s economy? It isn’t the next China, but it could still transform itself and the world"

How can they make this assumption when as recently as 1992, both countries had the same PPP GDP per capita?

hi! im doing a project in school right now about inflation and we are supposed to try and share the influence of it. does anyone have any ideas about how teens/young adults can contribute to improving inflation?

if privatized would it bring the same revenue to the state?

Hello. I have recently faced a great confusion regarding one topic. I would kindly appreciate if you could help me with it, since I actually need it as part of my master's thesis (not in economics, but let's say I need to point at the examples of quickly developing countries).

I have noticed an enormous disparity between the numbers given for the past purchasing power of different countries between what World Bank and IMF report. Let's compare

https://en.wikipedia.org/wiki/List_of_countries_by_past_and_projected_GDP_(PPP)_per_capita which is based on IMF data

with

https://ourworldindata.org/grapher/gdp-per-capita-worldbank?tab=table which is based on World Bank data

For example the latter says Germany's PPP per capita in 1990 was $36,699 and in 2021 it was $53,180. Meanwhile the former says it was actually $20,485 in 1990 and $59,184 in 2021.

The 2021 disparity is big but not that dramatic; what really messes with me is extreme disparity provided for 1990. This completely changes the narrative of Germany's economic growth of the past three decades, from almost tripling the purchasing power according to IMF data, to inreasing it by less than 50% according to World Bank.

I don't know what's the source of such wild disparities, and which source is more trustworthy. I suspect it's something involving inflation? I've been trying to find out differences in the methodology of both insitutions, but I have failed so far.

I would kindly appreciate your help.

The current market value of the stock market doesn’t just take into account today’s earnings, but discounts the future earnings stream to today, with the future earnings stream embedding some implied growth figure.

Then given that today’s prices assume a certain level of growth, if earnings grow in line with that growth rate, the stock market should not go up in theory. Doesn’t this therefore require a perpetually increasing growth rate for stocks to continue to go up, which is unsustainable?

Background: I have recently completed my undergrad and Master's in Economics from an Asian University (rank 300-350) with a cgpa 3.6+ (70% and above). I have one year of research experience and have recently joined the World Bank as an RA. I want to work as an economist at the World Bank, IMF, ADB or some international organisation. However, I'm pretty sure I'll need a PhD for further promotion in this field. I am fairly good at Maths (got perfect gpa in all math courses). However, I'm afraid I may not be eligible for the top phd programmes like LSE, BSE, SSE etc. My area of interest is macroeconomics and monetary policy. I have no publications but one of my papers has been selected for an ADB conference.

Are PhD programmes below top 100 worth it? Or should I do a second Masters to secure a higher grade and apply later? Should I opt for USA or European unis? Also financially I'm not in a good position to pay the high tuition fees of these programmes, so have to rely on scholarship or financial aid. I would also appreciate if you have any suggestions for suitable programmes.

I was looking at https://fred.stlouisfed.org and came across this graph - https://fred.stlouisfed.org/series/WFRBST01134

In it, there's an almost straight up trend from 1992 to 1995 where the total net worth held by the top 1% increases from 23% to 27.6%, before staying steady then crashing during the dot com bubble.

What happened here?

If a country's GDP is growing at x% and the inflation in that country is y%, then did they actually grow only (x-y)%.

For example,

India GDP growth rate 2023 - 7.2% India Inflation - 5.69%

Real Growth - (7.2-5.69) = 1.51%

Is this the right way to look at things?

So my country Afghanistan receive weekly aid from UN which means that our currency value is kept up high artificially. This has resulted in our currency to be overvalued compare to Iran and Pakistan. As such, products from those countries are cheaper than Afghan products and have flooded Afghanistan markets.

This means cheaper products to be available for the general people and it’s good. But I talked with few afghan industrialist and they said that at this rate Afghanistan factories will have to close down due to the prices and they wanted tariffs to rise.

So I understand both sides but I’m not sure. I read that US had very high tariffs when it industrialized. Same with many other countries to protect their industries until they are strong and competitive enough.

Recently, the FTC caused a stir by banning most noncompete agreements. A number of business groups have come out of the woodwork to warn us of all the awful things that will happen to the US economy if we ban noncompetes.

However, California banned noncompetes in 2008 — and even before then, their application within the state was severely limited. You know, California — the state that accounts for nearly 15% of the entire US economy. The very same California that is known throughout the world as a bastion of technological innovation. Nothing worthwhile has ever come out of California, right?

I'm not really trying to make a case for or against noncompetes (although you can probably tell which side I'm on). But what surprises me is how nobody is talking about this natural experiment in what happens when you ban non-competes. Seems to be completely absent from the conversation, and I don't understand why.

I got into an economics program at a school that is under an arts degree. I was wondering if an economics degree can have a 6 figure+ salary? (100k+)

Over the last 10 years, the only productivity increase in the fast food industry I can think of are kiosks for ordering digitally. The price of meat can fluctuate but wages generally trend up, especially in recent years. Is cost disease the main reason for fast food’s expensiveness? Does this extend to the entire restaurant industry?

Cities like Cleveland and Pittsburgh have become models for some revitalization by having healthcare take over as the primary employer. In many small to mid-sized Rust Belt cities hospitals or local healthcare companies have become the top employer or the highest paying in the area. How did this transition happen? Is it due to how expensive, and thus lucrative healthcare is in America? Is it due to the stain on health outcomes left by heavy industry? How have cities without universities been able to attract talent or gain an adequate workforce?

I don't know if this is an appropriate subreddit for this, but it was a question that I have always wondered, especially with marketing tactic awareness. I want to hear what r/askeconomics has to say

I'm not from the economics area and really want to know what people think of the video. I tried to write down more or less the arguments presented and wanted to share with you to have your opinion on them. Economist explains why you can't afford a house anymore - YouTube

The author, Dr. Dr. Joeri Schasfoort says:

1. presentes the theories of "Construction failure", "excessive speculation" and "financialization of housing", wich, according to him, should present a solid explanation to the increase of housing costs in most countries.
2. Basic concepts: housing is not a good like others. It is at the same time a consumption good and an investment good.
3. House as a consumption good and "Construction failure": Over the value of houses should thend to get lower, but if it "was just a consumption good, then the economic forces that determine it's price should be a really simple function of how many people there are and how many houses are built". According to the first theory - "Construction failure" - not enough houses have been built, wich makes it's prices rise.

3.1) If this theory is thruth, what evidences should we see? At 3:48 a graphic is presented showing that the new houses built in USA, Canada and New Zeland is more or less stable, since 1977. But on the demand side it's "pretty much impossible to find out precisely how many houses are needed by a changing population", but the population has largely increased in the three mentioned countries, specially in Canada and Australia. So, in these countries, if you analyse the house per person built, there's been a downwards trend. According to another graph presented (4:24), in 1977, it was about 100 ; in 2023 it was <75 (I still am not sure wath the graphs mean, tbh). There are some problems with using just this index: we don't know how long housed lasted during the period, and the ammount of population doesn't necessarily translate to the need of houses because "people tendo to live in smaller houses in these countries" (4:55) and people have moved more from countryside to cities and rural houses have become "useless because no one wants to live there anymore" (5:12).

3.2) So, why more houses were not built? NIMBYs - Not In My BackYard: A significant amount of peoeple, while in favor of new housing, are against doing so in their neighbourhoods. "The housing market is suffering from what is called a 'Collective action problem'" (6:17). Actions from people, while rational from a individual perspective, in the collective point of view create scarcity of habitation. He points that economists like Noah Smith fight against the blockage of new construction by the so called NIMBYs as a way to get out of the construction crisis. This, according the Jori, has happened in Auckland/NZ (6:55) a city wich "upzoned" 3/4 of the city allowing for low density terrains to be replaced by high density multistore buildings wich led the rent to income ratio to drop, most notably since 2020, while the rest of the country followed a opposite trend.

3.3) Problems with such theory: if this was the only explanation, then vacant houses in more affordable places should also be used, but he presents a graph showing the opposite (8:26). SImilarly, in China, while housing if more and more expensive, there are a lot of vacant units (around 7,2 million homes).

4. Housing as an investment: could explain situation in China and, for example, Ireland, Spain, USA (early 2000s). Since everyone needs to live somewhere, a high in price doesn't affect demand so hard. The "economics of housing as a speculative investment works a bit differently (...) a specualtor wants to win money with money" (11:00). For such investors, a high in the housing marking would make it more attractive, pouring more money in the market. Usually a speculative bubble goings in pair with a boom in construction, "however, given the positive feedback (...) even this increased supply is not enough to keep up with demand" (11:47). Sometimes, prices rise so fast investors don't even rent a vacant house.

4.1) According to Dr. Jori, we could teste the claim that houses are becoming more expensive due to "excessive speculation" but looking at vacant houses - but this only works by looking at areas where the prices are increasing or already too high (for example: if you look at a country with a population decline, the number of vacant houses will also increase).

5. House financialization: money is too cheap right now. (Vide works of Dr. Josh Ryan Collins from U. C. London). This all started in the 80s when politians wanted to make house more accecible and "liberalize mortgage markets" (13:52). By looking at a graph of home ownership rates (13:57), Jori questions this claim, but Dr. Josh Ryan says "since the majority of mortgage loans finance(d) the purchase of exiting rather than new property, the inevitable result is house price inflation" (14:01). Basically, you're just reating debt without increasing much of new houses. Countries liek Korea and Germany didn't experience this, because they didn't give such low rates incentives.

6. FMI claims houses are mor affordable today. Rates have gone down since the 80s - in the US they are around 7%, compared to around 19% in the 80s. at 17:36 he gives an example of a $100k studio apartment: today it would cost (at 7% rates) around $660 per month; in the 80s it would be around $1500 per month. In conclusion: prices are higher, but rates are lower. However focusing only on mortgage prices is a problem, for three reasons: A) it implicitly assumes anyone can get a mortgage, wich is not the same for the most vulnerable part of society; B) the presented graph is a mix of 40 countries so it looks at countries like Korea and USA (that have very different markets) with the same lens; C) Since the 2020s rates have gone high and housing affordability (BIS and IMF grapf at 19:12) has gone down in the last years.

7. Conclusion: Dr. Jori says that most countries don't have a housing bubble the NIMBYs seem to present a bigger problem for restriction of offer of housing in most countries.

Apparently I don't understand economics at all because I find myself asking 'so what' to these points from a Wall Street Journal commentary, regarding the consequences of the ECB cutting rates before the US:

Stronger dollar/weaker euro: If the ECB cuts first, that could weaken the euro. Comparatively lower European rates reduce the euro's appeal versus the dollar.

Lower bond yields: European and U.K. government bond prices would get a boost from early ECB rate cuts, according to HSBC. That means lower yields, which move inversely to prices.

Higher inflation?: A weaker euro would make imports more expensive for the currency bloc and could involve inflation pressure. That is one reason ECB policymakers will likely be wary of diverging too far from the Fed.

I can understand how each point comes to be, but I'm not seeing the real implications and why it's so weird/risky that actually makes it so ECB won't want to be too different from the US.

1. Obviously if EU has a lower rate than the US, money will go towards the higher yielding USD. This will make EUR weak, making imports expensive (I'm guessing most EU countries depend heavily on imports, but necessarily from US? I don't know). Expensive imports bring inflation up again, so it kind of makes the rate cuts, i.e. anti-inflation, pointless. Fair enough. Is that the only factor at play though?

2. Bond prices go up. This one I don't get. I don't know who is the main holder of ECB bonds but I don't see this being a negative consequence of ECB-Fed divergence.

3. See #1.

tldr: why would it be bad if the ECB cuts before the Fed

I know the general idea that Colonisation is bad but I wanted to get a real sense of how bad the British rule in India was. I saw an estimate by Utsa Patnaik that Britain got over $45 trillion but the methodology in my opinion looked too sketchy. Further I read that Bengal Famine was caused more by local Indians than the British admin but again many call the Historian behind the claim (Tirthankar Roy) to be apologist. Further even when British left India it was the 10th largest in world by GDP if I am not wrong. I get a general feeling that while Britain did exploit a lot, a large share was taken by the local zamindars, rulers and so on.

Basically I wanted to know what the real picture is and if possible some good sources that answer this question. On a scale of 1-10; 10 being the worst how bad was the British rule in India.

I’m doing my bachelors degree in mechanical engineering which I chose because of a combination of subjects that I like, a passion that is aeronautics and the broad job market plus comfortable salaries for the long run.

But my other big academic passion is social science, including obviously economics. From all the social sciences is the one which I like the most to consider doing seriously because I enjoy the mix of having math and social courses. The thing I would love the most about doing economics is the chance of working in the public sector. From what I’ve learned from it, it’s something that has a deep personal meaning for me.

Ideally I’d rather finish my degree in Mechanical Engineering and later pursue a masters in economics. My main problem is that I like both areas a lot. And this issue has been really stressful and tough to think through. I hope someone could please help me to do the two things that I enjoy the most in a realistic and sustainable way. Thank you

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In the 1890s, Argentina was the richest country in the world based on GDP per capita. However, their economy was based mainly on export and they didn’t/couldn’t industrialize. Thus, their economy stagnated, and the rest of the developed world left Argentina in the dust. But even then, in the 1960s, Argentina was still so rich that its GDP per capita was similar to Western Europe in that time. But Argentina was still economically stagnant and these days their GDP per capita has remained similar to how it was decades ago and now the rest of the developed world (America, Britain, etc) is so far ahead of Argentina that Argentina is classified as ‘developing’ these days. So Argentina isn’t even considered developed anymore.

For Japan, they were one of the richest countries in the world GDP per capita based in the 1990s, but they too are now in stagnation since then and the rest of the developed world has since surpassed them GDP per capita (America, Germany, Australia, etc). But Japan was so rich in the 1990s that even if they are stagnant they are still one of the richest countries in the world. But their economy, put simply, just does not grow. Their economy 29 years ago was 5.5 trillion, and in 2024 it is merely 4.1 trillion.

Is Japan heading on the path like Argentina where they regress from developed to developing, not because Japan or Argentina are “worse” than before but rather because the rest of the world improved so much, that Japan will no longer be considered ‘develoepd’ as many developing countries maybe start to match its GDP per capita?

Cuz it’s not like Argentina is poor for instance. They have high levels of literacy, free college and healthcare, incredible infrastructure, etc. You can tell it’s HDI is high, it’s just that compared to the developed world (America, Canada) Argentina didn’t grow at a rate anywhere near as good they did so in comparison to America and Canada, Argentina has very little money/GDP per capita. Argentina has the lifestyle peope in America and Canada have, but because their economy didn’t grow at the same rate, they have much much less disposable income.

Is Japan going down this route? It feels like Japan is the same as Argentina, but exactly 100 years later (1890s vs 1990s). The Japanese Yen is getting weaker like how the Argentine Peso got weaker as well.

When you hear inflation discussed, you hear that is is “stubborn” like a wild animal, and when you hear how inflation comes down it is said it is “tamed” or that it’s “back was broken”. What’s with the strange choice of words when talking about this aspect of economics specifically?

I know this is not really economics, but I figure that if this popular theory was true, it would somehow appear in data and that economists would know how to find it.