Economics

Did you know that there’s not one, but three types of inflation? (Well, there are probably more than that, but this article only focuses on three.) Inflation, defined simply, is the increase in prices in an economy and the subsequent reduction in the value of the country’s currency. This great infographic-based article highlights three separate causes of inflation: an increase in the supply of money by the government; an increase in the prices of consumer goods; or an increase in the prices of assets (think stocks and bonds). Read full article here

The world’s millionaires have always moved around from place to place, and they’re starting to move again two years after the pandemic put travel on hold. Where are they going? They’re flocking to countries like the UAE and Australia because of their favourable policies and attitude toward rich immigrants. For example, in the last 20 years, about 80,000 millionaires have moved to Australia because of its low health care costs, lack of an inheritance tax, and a very strong economy. Read full article here

Prior to the 20th century, Taiwan and South Korea were not the prosperous countries we know them to be today. How did they escape the clutches of poverty? They innovated and pivoted towards export-oriented manufacturing. Called the East Asian development model, this strategy is one of the ways poor countries can become rich. Exporting goods, especially technological goods that Taiwan and S.Korea export, opens up a country’s economy to the global market— i.e. wealthy individuals who can buy more goods than their currently low-income populace can afford. Read full article here

Opportunity cost is the cost of choosing an option over another and is measured by the value of the option not chosen. But what happens if the only other option has a negative value for us? We then get a negative opportunity cost, which is actually a net benefit. For example, having good microbes in our gut is vastly preferable to having harmful ones. This is an example of a negative opportunity cost because there is no positive or zero-value alternative: one can’t have a sterile gut. Read full article here

The price disparity between men’s and women’s razors in supermarkets is an example of the pink tax at work. The pink tax is not a real tax, but is gender-based pricing discrimination; it’s the phenomenon where products marketed towards women are more expensive than identical products marketed towards men. It’s most often seen in the personal hygiene aisle, where female-targeted products can be as much as 13% more expensive than their male-targeted counterparts. Read full article here

Aside from culture and the abundance of bike lanes throughout Denmark, Danes love cycling because of taxes. Cycling is the more affordable and financially wise method of transport when compared to driving an automobile. Denmark imposes high taxes on petrol along with a hefty 150% excise tax on newly purchased vehicles, which makes owning a car for some Danes unfeasible. Read full article here

The story of Laffer’s Curve is almost mythical in economics; allegedly, the equation was conceived by economist Arthur Laffer over a dinner discussion, and written on a napkin. With him were future politicians Dick Cheney and Donald Rumsfeld. Although Laffer concedes that it’s not entirely true, the perfect circumstances, as detailed in the story, are what Robert Shiller believes allowed Laffer’s ideas to become widespread. Shiller believes that narratives are powerful tools that can influence economics, accelerating the uptake of new theories compared to narrative-less stories. Read full article here

Kate Raworth’s doughnut economic model claims that we can achieve a “safe and just space for humanity” by balancing development, resource management, and human wellbeing. However, her suggestions for achieving this balance may be too optimistic, or even utopian. For example, she promotes a move to digital services in tandem with the adoption of renewable energy. To the author, it’s against her goals, as she doesn’t seem to understand how much energy the digital world needs to run and how much human suffering is involved in powering it. Read full article here

Our altered spending patterns seem to be to blame for the pandemic’s inaccurate inflation statistics. According to the Economics Report, UK institutions are reporting a lower inflation rate than projected after the start of lockdowns. It suggested that this is because the apparel, footwear, and transportation sectors were misrepresented in the statistics; by being assigned a greater spending rate consistent with pre-pandemic levels, they brought down inflation owing to their post-pandemic negative inflation rates. Read full article here

With the ecological shift affecting conventional agriculture of the West, harvests in the summer were smaller compared to previous years. To salvage the economy in Montana, farmers have started incorporating regenerative soil-building systems into their current practices. Among these producers is Bob Quinn, whose experiments focus on investing in soil health to increase soil fertility and produce higher yields. His approach — the shift from conventional to organic farming — aims to revitalise the local economy in the state. Read full article here