Seems a little extreme for a .5% increase, these things might happen anyway if the cost of power keeps going up. But I have no idea what kind of economic pain it would take for that scenario to occur.
The Economics Thread
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Seems a little extreme for a .5% increase, these things might happen anyway if the cost of power keeps going up. But I have no idea what kind of economic pain it would take for that scenario to occur.
I saw him go on a thirty tweet rant about the end of days over fuel prices this winter. So I’d take his opinions with a similar sized pinch of salt to my own about United’s prospects this season.
Economics is such an odd “science”. There’s a load of possibilities for bias in every area of science but in none of them do you find personal political bias so front and centre. Makes it incredibly hard to know who to trust.
Bad time to borrow with interest rates rising today to 2.25%
Any thoughts economibros?
Any thoughts economibros?
If you can still get 2.25% it might be the best you can for a long time coming. Everyone was waiting for this low interest period to end and now world events have come thick and fast.
Still lower than inflation rates. If you need to invest do it now while that borrowed money still gives you value.
Interest rates are still very low by historic standards, even after the rise. Make of that what you will.
What do you economist make of the budget that was not supposed to be a budget?
Can someone explain this?
https://www.cnbc.com/2022/10/20/tur...is-points-despite-inflation-at-83percent.html
https://www.cnbc.com/2022/10/20/tur...is-points-despite-inflation-at-83percent.html
Erdogan doesn't believe in economics. That's why it's at 83% in the first place.
It explains why national banks have to be independent from politicians, cause politicians (a) don't know economics to the extent required (not that all economists agree, but they're not as far off of each other as Erdogan is of common sense), and (b) will do random shit that might be politically expedient in the short term.
I.e., it's Erdogan fecking things up because he thinks he knows better and will get more votes through his approach.
Why more votes though? Wouldn't Turkish citizens prefer a government that tackles inflation?
You'd think so, and I'd think so, but there is a section in your article that talks about how this might be an electoral strategy. Maybe Erdogan is thinking people will care more about a low interest rate (with its effects on mortgages etc.) than inflation? I mean, I'd highly doubt it, but he thinks his policy is sound in the first place, so who knows what else he believes...
Erdogan believes that interest rates are a cost. If interest rates are lowered, then costs will be lowered. For a given margin, lower costs means lower prices and hey presto, you have lower inflation.
The mistake he makes is that lowering Turkish interest rates makes the Turkish Lira depeciate versus other currencies. If you are Turkish and are an importer, the weaker Turkish Lira will mean that your imports now cost more. These importers then pass on these increased costs to consumers in the form of higher prices.
Thought this was interesting.
On twitter, a lot of debate about "greedflation", inflation reflected only in higher profit margins. Even outlets like the Economist, Forbes, and the last bastion WSJ have said there is something to this theory.
Is this any different from other inflation? Is it even possible?
If a firm can sell 10 items for $10 each, or 8 items for $15 each, it will obviously choose the second option. This would indeed be reflected in higher profit margins, but is not caused by them, it is caused by the consumers' willingness to pay (as reflected in their spending).
Is this any different from other inflation? Is it even possible?
If a firm can sell 10 items for $10 each, or 8 items for $15 each, it will obviously choose the second option. This would indeed be reflected in higher profit margins, but is not caused by them, it is caused by the consumers' willingness to pay (as reflected in their spending).
It's not sustainable in any market with competition.
Competitiors will enter the market and undercut, pushing prices down.
Greedflation only sustainable short term or in markets without competition.
Competitiors will enter the market and undercut, pushing prices down.
Greedflation only sustainable short term or in markets without competition.
I've gone through the entire world's import/export balance, and then sorted it by GDP, population, and made per capita calculations based on those figures. Some results (data is wrong in various places: Iran does not have a net of -13bn, but a surplus of about 30bn, but by and large the primary nations are accurate).
Asia:
China - Net: 1,538,011 ($16.64 trillion) (1,087)
Japan - Net: 101,249 ($5.39 trillion) (799)
India - Net: 122,694 ($3.31 trillion) (88)
South Korea - Net: 216,045 ($1.76 trillion) (4,193)
Saudi Arabia - Net: 123,212 ($0.79 trillion) (3,536)
Turkey - Net: 34,867 ($1.46 trillion) (432)
Israel - Net: -16,663 ($0.40 trillion) (-2,078)
United Arab Emirates - Net: 43,737 ($0.42 trillion) (4,418)
Iran - Net: -13,376 ($0.54 trillion) (-166)
Singapore - Net: 128,670 ($0.64 trillion) (22,948)
Malaysia - Net: 109,511 ($0.35 trillion) (3,457)
Iraq - Net: -48,031 ($0.19 trillion) (-1,215)
Kazakhstan - Net: 18,724 ($0.53 trillion) (1,066)
Europe:
Germany - Net: 454,530 ($4.24 trillion) (5,458)
United Kingdom - Net: -109,322 ($3.16 trillion) (-1,616)
France - Net: 254 ($2.95 trillion) (4)
Italy - Net: 198,131 ($2.24 trillion) (3,316)
Netherlands - Net: 95,341 ($1.04 trillion) (5,552)
Switzerland - Net: 89,171 ($0.78 trillion) (10,607)
Poland - Net: 70,653 ($0.64 trillion) (1,854)
Sweden - Net: 40,011 ($0.61 trillion) (4,057)
Belgium - Net: 240,667 ($0.63 trillion) (20,696)
Norway - Net: 79,056 ($0.72 trillion) (14,583)
Austria - Net: 30,727 ($0.51 trillion) (3,459)
Ireland - Net: 92,027 ($0.43 trillion) (17,663)
Denmark - Net: 27,453 ($0.37 trillion) (4,759)
Finland - Net: 13,463 ($0.29 trillion) (2,426)
Portugal - Net: -2,441 ($0.24 trillion) (-241)
Greece - Net: -9,062 ($0.20 trillion) (-847)
Hungary - Net: 25,902 ($0.17 trillion) (2,661)
Romania - Net: -4,741 ($0.27 trillion) (-238)
North America:
United States - Net: -653,117 ($22.68 trillion) (-1,970)
Canada - Net: 98,725 ($1.74 trillion) (2,611)
Mexico - Net: 27,302 ($1.32 trillion) (214)
South America:
Brazil - Net: 121,880 ($1.45 trillion) (575)
Colombia - Net: -3,000 ($0.31 trillion) (-61)
Argentina - Net: 35,483 ($0.45 trillion) (802)
Africa:
Nigeria - Net: -5,393 ($0.50 trillion) (-26)
South Africa - Net: -53,997 ($0.36 trillion) (-1,363)
Oceania:
Australia - Net: 142,777 ($1.38 trillion) (5,673)
New Zealand - Net: 6,196 ($0.24 trillion) (1,264)
Middle East:
Qatar - Net: 46,118 ($0.20 trillion) (29,815)
Kuwait - Net: 32,206 ($0.14 trillion) (7,330)
Interesting results (surplus figures as % of GDP):
Belgium: 38% (surplus: 240,667 million)
Ireland: 21% (surplus: 92,027 million)
Germany: 11% (surplus: 454,530 million)
Switzerland: 11% (surplus: 89,171 million)
Norway: 11% (surplus: 79,056 million)
Poland: 11% (surplus: 70,653 million)
Netherlands: 9% (surplus: 95,341 million)
Italy: 9% (surplus: 198,131 million)
Denmark: 7% (surplus: 27,453 million)
Austria: 6% (surplus: 30,727 million)
Hungary: 5% (surplus: 25,902 million)
Sweden: 5% (surplus: 40,011 million)
Finland: 5% (surplus: 13,463 million)
France: 0% (balance: 254 million)
Portugal: -1% (deficit: -2,441 million)
Romania: -2% (deficit: -4,741 million)
United Kingdom: -3% (deficit: -109,322 million)
Greece: -5% (deficit: -9,062 million)
Asia:
China - Net: 1,538,011 ($16.64 trillion) (1,087)
Japan - Net: 101,249 ($5.39 trillion) (799)
India - Net: 122,694 ($3.31 trillion) (88)
South Korea - Net: 216,045 ($1.76 trillion) (4,193)
Saudi Arabia - Net: 123,212 ($0.79 trillion) (3,536)
Turkey - Net: 34,867 ($1.46 trillion) (432)
Israel - Net: -16,663 ($0.40 trillion) (-2,078)
United Arab Emirates - Net: 43,737 ($0.42 trillion) (4,418)
Iran - Net: -13,376 ($0.54 trillion) (-166)
Singapore - Net: 128,670 ($0.64 trillion) (22,948)
Malaysia - Net: 109,511 ($0.35 trillion) (3,457)
Iraq - Net: -48,031 ($0.19 trillion) (-1,215)
Kazakhstan - Net: 18,724 ($0.53 trillion) (1,066)
Europe:
Germany - Net: 454,530 ($4.24 trillion) (5,458)
United Kingdom - Net: -109,322 ($3.16 trillion) (-1,616)
France - Net: 254 ($2.95 trillion) (4)
Italy - Net: 198,131 ($2.24 trillion) (3,316)
Netherlands - Net: 95,341 ($1.04 trillion) (5,552)
Switzerland - Net: 89,171 ($0.78 trillion) (10,607)
Poland - Net: 70,653 ($0.64 trillion) (1,854)
Sweden - Net: 40,011 ($0.61 trillion) (4,057)
Belgium - Net: 240,667 ($0.63 trillion) (20,696)
Norway - Net: 79,056 ($0.72 trillion) (14,583)
Austria - Net: 30,727 ($0.51 trillion) (3,459)
Ireland - Net: 92,027 ($0.43 trillion) (17,663)
Denmark - Net: 27,453 ($0.37 trillion) (4,759)
Finland - Net: 13,463 ($0.29 trillion) (2,426)
Portugal - Net: -2,441 ($0.24 trillion) (-241)
Greece - Net: -9,062 ($0.20 trillion) (-847)
Hungary - Net: 25,902 ($0.17 trillion) (2,661)
Romania - Net: -4,741 ($0.27 trillion) (-238)
North America:
United States - Net: -653,117 ($22.68 trillion) (-1,970)
Canada - Net: 98,725 ($1.74 trillion) (2,611)
Mexico - Net: 27,302 ($1.32 trillion) (214)
South America:
Brazil - Net: 121,880 ($1.45 trillion) (575)
Colombia - Net: -3,000 ($0.31 trillion) (-61)
Argentina - Net: 35,483 ($0.45 trillion) (802)
Africa:
Nigeria - Net: -5,393 ($0.50 trillion) (-26)
South Africa - Net: -53,997 ($0.36 trillion) (-1,363)
Oceania:
Australia - Net: 142,777 ($1.38 trillion) (5,673)
New Zealand - Net: 6,196 ($0.24 trillion) (1,264)
Middle East:
Qatar - Net: 46,118 ($0.20 trillion) (29,815)
Kuwait - Net: 32,206 ($0.14 trillion) (7,330)
Interesting results (surplus figures as % of GDP):
Belgium: 38% (surplus: 240,667 million)
Ireland: 21% (surplus: 92,027 million)
Germany: 11% (surplus: 454,530 million)
Switzerland: 11% (surplus: 89,171 million)
Norway: 11% (surplus: 79,056 million)
Poland: 11% (surplus: 70,653 million)
Netherlands: 9% (surplus: 95,341 million)
Italy: 9% (surplus: 198,131 million)
Denmark: 7% (surplus: 27,453 million)
Austria: 6% (surplus: 30,727 million)
Hungary: 5% (surplus: 25,902 million)
Sweden: 5% (surplus: 40,011 million)
Finland: 5% (surplus: 13,463 million)
France: 0% (balance: 254 million)
Portugal: -1% (deficit: -2,441 million)
Romania: -2% (deficit: -4,741 million)
United Kingdom: -3% (deficit: -109,322 million)
Greece: -5% (deficit: -9,062 million)
UK and US are outliers. The UK, within Tory austerity rule, unless someone wishes to correct me regarding the Blair years, is running a deficit of the variety that the US runs habitually (and habitually defends). A kind of asterisk regarding broader economic alignment, geopolitical, between the two nations.
UK: -1,616
US: -1,970
Export deficits of 100bn~ and 650bn~ respectively then weighed by GDP and overall net-export per capita. - for each. Figures might be a bit off, was a lot of data, and still ordering it, but it's broadly accurate.
UK: -1,616
US: -1,970
Export deficits of 100bn~ and 650bn~ respectively then weighed by GDP and overall net-export per capita. - for each. Figures might be a bit off, was a lot of data, and still ordering it, but it's broadly accurate.
I suppose I should read this as saying that, for example, China has a per capita import surplus of 1,087, and Israel an export surplus of 2,078. Or is it the other way round?
Either way, what does it mean? I can see the numbers but I have no idea about their implications.
Unlikely at a certain scale. Enter in certain markets it is virtually imposdible due to economies of scale and oligolistic/lobbistic behaviors.
When you have just a few conpanies that own most of the food that are in the supermarkets (with their infinite brands under 1 umbrella), you cant undercut them as they have agreements with the centers of distribuition, agreements with the logistic companies that offers them better deals, massive economies of scale, raw material producers that habe multiyear contracts (who they squeeze for their lifes) who no one else can have access, better banking financial access and of course political lobbying
Sure might be some local successes hystories here and there, but with all the political influence they have and many other advantages, no one can step in realistically speaking
The same happrns with banking services and of course oil companies
For those wanting a basic overview:
https://podcasts.apple.com/gb/podca...of-living-crisis/id1112605665?i=1000561766522
I pretty much worshipped Albrecht Ritschl in my formative years. Super smart guy.
https://podcasts.apple.com/gb/podca...of-living-crisis/id1112605665?i=1000561766522
I pretty much worshipped Albrecht Ritschl in my formative years. Super smart guy.
A population thing (1.4bn people to 7 million). Israel runs a -2078 deficit. I.e., for every person, it works out at exactly -2078 (dollars) (thousands) per year. Now, China has 1.4bn people so do the multiplication and you see that they are ahead both nominally and per capita of many nations (just in net export terms).
Belgium and Ireland: 20k~ and 17k~ surplus per-person (240bn~ and 90bn~, respectively, thus the massive % on the summarized list by population).
After China's immense 1.5tn surplus, net, Germany's 450bn is, I think the next largest is pure volume. Just an interesting way of reading an economic situation minus the usual GDP or debt figures. By itself, not anything like the full story, but with debt figures, forecasts, and more, you get a nuanced understanding (especially if we then go sector by sector and create, which I might do, various means of charting foreign direct investment, general movement of capital, and so on and on).
I just find it interesting that among the traditional G10 or G20 nations, only the US/UK are running that kind of deficit. Russia, who knows, I imagine a net export surplus in normal times because they have immense amounts of minerals and so on and their economy, like many pure petro economies (though more advanced than most of them, if not all) needs to diversifiy.
Consider:
| Rank | Measured by $ Amount (millions US$): | Rank | Measured as % of GDP (%GDP) | |||
|---|---|---|---|---|---|---|
1 | United States | 29,463,730 | 1 | Japan | 259.43% | |
2 | Japan | 13,053,658 | 2 | Sudan | 200.35% | |
3 | China | 10,115,837 | 3 | Greece | 194.50% | |
4 | France | 3,329,379 | 4 | Eritrea | 179.66% | |
5 | Italy | 3,169,955 | 5 | Singapore | 159.87% | |
6 | United Kingdom | 3,039,338 | 6 | Maldives | 154.39% | |
7 | Germany | 2,968,690 | 7 | Lebanon | 150.58% | |
8 | India | 2,379,040 | 8 | Italy | 150.30% | |
9 | Canada | 2,243,918 | 9 | Cape Verde | 145.13% | |
10 | Spain | 1,690,788 | 10 | Barbados | 135.40% | |
11 | Brazil | 1,495,729 | 11 | Venezuela | 133.61% | |
12 | Australia | 954,634 | 12 | Bhutan | 132.42% | |
13 | South Korea | 929,584 | 13 | Bahrain | 129.73% | |
14 | Mexico | 746,964 | 14 | United States | 128.13% | |
15 | Iran | 674,167 | 15 | Suriname | 125.70% | |
16 | Singapore | 650,630 | 16 | Portugal | 125.50% | |
17 | Belgium | 649,405 | 17 | Zambia | 119.14% | |
18 | Netherlands | 530,350 | 18 | Spain | 118.30% | |
19 | Indonesia | 488,638 | 19 | Canada | 112.85% | |
20 | Greece | 431,474 | 20 | France | 112.80% |
2022 figures.
More has been written about the American debt, over thirty years, at least since Clinton sought to balance (not the entire debt, but the export situation iirc, have to check), but how do they pay a 30 trillion dollar debt with a 650bn deficit every single year? Ireland has a national debt of 225bn. But its economy is closer to 450bn, or so, and it has a surplus, yearly, which means, in big picture terms, certain nations have weathered the 2008 storm far better than others. How Japan is at 250% (11tn in debt) is beyond me. But they do have a 100bn net surplus. Just an interesting way of viewing national trading/debts and so on.
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I thought this was interesting: Reducing inequality benefits everyone — so why isn’t it happening? (nature.com). It's pretty high-level, but it explains the overall benefits of better income equality to the entire population of countries, and how the metric for this (the Gini index) is actually dropping in many countries.
I don't get why leftist political parties aren't catching on to this more. It obviously doens't fit the right's usual political focus, but for the left, isn't this like shooting fish in a barrel...? Sure, it takes a bit of messaging to explain why this is accurate and not a communist fantasy (or whatever the accusation would be), but it's a simple point that can easily be made - no?
I don't get why leftist political parties aren't catching on to this more. It obviously doens't fit the right's usual political focus, but for the left, isn't this like shooting fish in a barrel...? Sure, it takes a bit of messaging to explain why this is accurate and not a communist fantasy (or whatever the accusation would be), but it's a simple point that can easily be made - no?
Random bump but I'd be interested to know what the case is for other European countries?
So does no one give a shit about this? Or is it not a problem at all for the US?
I couldn't find a thread to put this in, but you economics nerds probably care about lame stuff like efficiency and viability and urban planning and shit like that.
For any economists here:
Country A and B are identical in every way. One of their common features is that housing has been nationalised a while ago, and everyone's house is on a temporary or permanent lease at a nominal rate, paid to the government.
Suddenly, country A opens its entire housing stock to the market. Everyone, including the current homeowners, corporations, and foreign investment firms, are able to buy any house by bidding the highest price for each unit to the govt (the current owner of each unit). They can then occupy or rent out the house, or keep it as an asset.
There is no other change in either country (for convenience no country builds any further housing stock*). Neither country has laws against homelessness or rough sleeping, or includes shelter as part of a right to life.
My intuition is that country A will have substantially higher wealth as well as GDP per capita in a few (10?) years. The reason for increased wealth is obvious, as an asset originally out of the market, and being lent at very sub-market rates, is now at its equilibrium price. I think the reason for higher GDP would be the ability to use this increased wealth as collateral, allowing the funding of more risky ventures, bringing in more liquidity, etc.
Is this correct?
(I do have a similar question where a nationalised free-at-point healthcare system is sold to the open market, which leads to increased bureacracy for billing, and also increased GDP as healthcare spending increases, more people get employed doing that work working out bills, denying claims, less people can cling onto savings, etc. But I have to think that through a bit)
*A gross assumption for simplifying things. Because I want the *only* change to be change in ownership of one type of asset.
I think the reason for increased wealth in A will be obvious if further building is possible, as richer people build more houses to spend weekends in, etc.
Country A and B are identical in every way. One of their common features is that housing has been nationalised a while ago, and everyone's house is on a temporary or permanent lease at a nominal rate, paid to the government.
Suddenly, country A opens its entire housing stock to the market. Everyone, including the current homeowners, corporations, and foreign investment firms, are able to buy any house by bidding the highest price for each unit to the govt (the current owner of each unit). They can then occupy or rent out the house, or keep it as an asset.
There is no other change in either country (for convenience no country builds any further housing stock*). Neither country has laws against homelessness or rough sleeping, or includes shelter as part of a right to life.
My intuition is that country A will have substantially higher wealth as well as GDP per capita in a few (10?) years. The reason for increased wealth is obvious, as an asset originally out of the market, and being lent at very sub-market rates, is now at its equilibrium price. I think the reason for higher GDP would be the ability to use this increased wealth as collateral, allowing the funding of more risky ventures, bringing in more liquidity, etc.
Is this correct?
(I do have a similar question where a nationalised free-at-point healthcare system is sold to the open market, which leads to increased bureacracy for billing, and also increased GDP as healthcare spending increases, more people get employed doing that work working out bills, denying claims, less people can cling onto savings, etc. But I have to think that through a bit)
*A gross assumption for simplifying things. Because I want the *only* change to be change in ownership of one type of asset.
I think the reason for increased wealth in A will be obvious if further building is possible, as richer people build more houses to spend weekends in, etc.
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I think theoretically Country B could make it up if the government borrows and the lenders (internal or external) know that it has that extra revenue (compared to just tax revenue) from the housing, and the government itself invests in risky ventures or other projects.
Thanks, makes sense. I guess the commonality is that the housing stock needs to be seen/accepted as a financial asset by the lenders/govt.
You postulated that it can't be sold/privatized in Country B, so I wasn't thinking that it could serve as a guarantee. But any lender would see how all that rent plays into the government accounts as a source of revenue.
If the country became over-burdened by interest payments via either higher interest rates or economic contraction leading to lower tax revenues, then I'm assuming they would have the possibility of increasing rent amounts.
But to summarize, an asset or the future cashflows derived from an asset amount to the same (which is how assets are valued... and you probably already know this
).Well Chemistry and Physics are proper science. Economics is some kind of social science. It's still valuable but it get's discredited by nonces with algorithms who think if they make their methodology more complicated it becomes more relevant, when often the opposite is the case.
I didn't know so I googled it and it's something to do with market competiveness. Which didn't help in the slightest, I'm no better off.
From the paper in the next tweet
Figure
1 illustrates the trend in the institutional concentration of Nobel laureates, as quantified by
the Herfindahl-Hirschman Index (HHI), across various disciplines starting in 1950.2 Notably,
economics stands out as the sole field that demonstrates both a high degree of concentration
and an ascending trend over time. Conversely, chemistry, physics, and medicine all display
low levels of concentration, with a general trend toward further decentralization.
Figure
1 illustrates the trend in the institutional concentration of Nobel laureates, as quantified by
the Herfindahl-Hirschman Index (HHI), across various disciplines starting in 1950.2 Notably,
economics stands out as the sole field that demonstrates both a high degree of concentration
and an ascending trend over time. Conversely, chemistry, physics, and medicine all display
low levels of concentration, with a general trend toward further decentralization.
So it means there are fewer places producing top-level economists compared to the number involved in medicine, physics and chemistry? Isn't that kind of what you would expect for a smaller discipline? I've no doubt got it wrong but that's my first reading of it.
Well, I looked it up, and it's not *that* much smaller: there are 12k economics professors, 14k physics, and 20k chemistry professors.. Only bio (40k) is way ahead.
Also at a guess, I think there'd be more economics students than physics and maybe chemistry.
Oh right, my bias I guess, I studied a bio science. If it does prove what Pettis is saying it proves I'd be interested to know why.