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Economic Myths

Economic Myths
"The Olympian gods" Nicolas-André Monsiau (1754–1837) Mainstream economists and so-called experts have filled the minds of most Americans with many economic myths that are constantly reinforced by the media and repeated on the streets. These myths are erroneous at best, sometimes based on half truths. The majority of them are just false. Inflation and Energy Myths Inflation — or, rather, the general rise in prices[1] —and the increase in energy prices are issues that have always created numerous economic myths.The following are some of the most common ones. Myth # 1: "Dependence on Foreign Oil" This myth basically suggests that the problem with oil prices is due to America's "dependence" on foreign oil. The high price of oil has nothing to do with its origin; the price of oil is determined in international markets. Importing a product does not mean you "depend" on it. Myth # 2: "Inflation is caused by rising oil prices." False. At first this myth might seem true. Consumption Myths False. Note Related:  Economy

untitled September 2009 If I tell someone I am a financial mathematician, they often think I am an accountant with pretensions. Since accountants do not like using negative numbers, one of the oldest mathematical technologies, I find this irritating. A roll of the dice I was drawn into financial maths not because I was interested in finance, but because I was interested in making good decisions in the face of uncertainty. The average value of rolling a dice converges to the expected value of 3.5 when the dice is rolled a large number of times. With the exception of Pascal’s wager (essentially that you've got nothing to lose by betting that God exists), the early development of probability, from Cardano, through Galileo and Fermat and Pascal up to Daniel Bernoulli, was driven by considering gambling problems. Measure theory Building on Jacob Bernoulli’s work, probability theory was developed by the likes of Laplace in the eighteenth century and the Fisher, Neyman and Pearson in the twentieth.

Profit efficiency Profit efficiency is a macro-economic concept used in assessing whether an economy, industry or supply chain is expending an optimally balanced level of rent for the use of capital. Economies where too much profit is being extracted are over-paying the owners of capital at the expense of other contributors to a productive economy or industry. Economies and Industries that provide insufficient returns to the owners of capital should find that capital is moved to alternate investments where the return is greater. From an investor's perspective, profit efficiency is turned on its head from that of the macro-economic perspective. Tendency of the rate of profit to fall The tendency of the rate of profit to fall (TRPF) is a hypothesis in economics and political economy, most famously expounded by Karl Marx in chapter 13 of Das Kapital, Volume 3. Although no longer accepted in mainstream economics, the existence of such a tendency was more widely accepted in the 19th century.[1] Karl Marx on the TRPF[edit] Simply put, Marx argued that technological innovation enabled more efficient means of production. Physical productivity would increase as a result, i.e. a greater output (of use values, i.e., physical output) would be produced, per unit of capital invested. So Marx regarded this as a general tendency in the development of the capitalist mode of production. There could obviously also be several other factors involved in profitability which Marx did not discuss in detail,[11] including: David Harvey mentions that in the Grundrisse, "Marx lists a variety of other factors that can stabilize the rate of profit 'other than by crises' Crisis theories[edit]

New study finds fastest-growing cities not the most prosperous Los Angeles, CA (July 19, 2012) As communities seek new ways to emerge from the recession, many may look to growing their population as a strategy. However, the belief that population growth will bring jobs and economic prosperity for local residents is a myth. These findings are published in a new study in the latest issue of Economic Development Quarterly (published by SAGE). "Growth may be associated with economic development success; however, it is not the cause of that success," wrote study author Eben Fodor. Fodor examined the relationship between growth and economic prosperity in the 100 largest U.S. metropolitan areas from 2000 to 2009 to determine whether certain benefits commonly attributed to growth are supported by statistical data. "The successful economic development program is typically the one that creates new jobs," Fodor wrote. This new study used information taken from the U.S. A full copy of the study "Relationship between Growth and Prosperity in 100 Largest U.S.

U.S. National Debt Clock : Real Time Avinash Kaushik - Photos du journal Table 5: Gender-related development index (GDI) Download all data Table 5: Gender-related development index (GDI) Notes a. Definitions Female to male ratio: Ratio of female to male Human Development Index (HDI) value (see also definition of HDI). Human Development Index (HDI): A composite index measuring average achievement in three basic dimensions of human development—a long and healthy life, knowledge and a decent standard of living. Life expectancy at birth: Number of years a newborn infant could expect to live if prevailing patterns of age-specific mortality rates at the time of birth stay the same throughout the infant’s life. Mean years of schooling: Average number of years of education received by people ages 25 and older, converted from educational attainment levels using official durations of each level. Expected years of schooling: Number of years of schooling that a child of school entrance age can expect to receive if prevailing patterns of age-specific enrolment rates persist throughout the child’s life. Main Data Sources

Werkwijze Apple zuigt samenleving leeg Op de dag dat Apple Inc. haar vierde kwartaalcijfers bekend maakt, komen SOMO en het GoodElectronics netwerk met een kritisch paper over de manier waarop Apple met haar enorme bedrijfswinsten onze samenleving tekort doet. Dit doet Apple door zich te gedragen als financiële investeerder in plaats van haar winsten in de ‘echte’ economie te investeren. Apple als investeringsfonds Het bedrijf minimaliseert op slimme wijze haar bedrijfsuitgaven door het onophoudelijk verplaatsen van productie en gerelateerde ‘activiteiten’ naar lage-lonen landen en belastingparadijzen. Apple als voorbeeld van een wereldwijde trend Deze studie van Apple staat niet op zich, maar is slechts een voorbeeld van hoe multinationale ondernemingen collectief het Wall Street adagium aandeelhouderswaarde hebben omarmd, wat leidt tot een wereldwijde ‘race to the bottom’. Verarming van de samenleving Herziening strategie is in het voordeel van multinationals Download het paper Bekijk ook de video: Dit artikel: Deze website:

21 hours 21 hours A ‘normal’ working week of 21 hours could help to address a range of urgent, interlinked problems: overwork, unemployment, over-consumption, high carbon emissions, low well-being, entrenched inequalities, and the lack of time to live sustainably, to care for each other, and simply to enjoy life. February 13, 2010 // Written by: Anna Coote, Head of Social PolicyJane Franklin, Project Co-ordinator and Researcher, Social Policy This report sets out arguments for a much shorter working week. The vision Moving towards much shorter hours of paid work offers a new route out of the multiple crises we face today. A ‘normal’ working week of 21 hours could help to address a range of urgent, interlinked problems: overwork, unemployment, over-consumption, high carbon emissions, low well-being, entrenched inequalities, and the lack of time to live sustainably, to care for each other, and simply to enjoy life. There is nothing natural or inevitable about what’s considered ‘normal’ today. Issues

The Great Escape (Angus Deaton) Een paar weken geleden werd de Nobelprijs voor de economie uitgereikt. Van tevoren vroeg ik mij af op de prijs wellicht zou gaan naar Thomas Piketty, schrijver van het boek Capital in the Twenty-First century, vanwege zijn spraakmakende onderzoek over de effecten van economische ongelijkheid. Dat bleek niet het geval te zijn. De prijs ging naar iemand die ik niet kende, Angus Deaton, een schotse econoom die werkt aan Princeton. Interessant genoeg heeft deze econoom zich ook verdiept in economische ongelijkheid. In het boek beschrijft hij hoe de wereld er beter voorstaat dan vroeger. Deze nieuwe ongelijkheid was dus een nieuw probleem, ontstaan door progressie.

The Great Decoupling As machine learning advances at exponential rates, many highly skilled jobs once considered the exclusive domain of humans are increasingly being carried out by computers. Whether that’s good or bad depends on whom you talk to. Technologists and economists tend to split into two camps, the technologists believing that innovation will cure all ills, the economists fretting that productivity gains will further divide the haves from the have-nots. Video Should we create livelihood insurance? Nobel Prize–winning economist Robert Shiller tells McKinsey’s Rik Kirkland how livelihood insurance could protect workers against job automation. Play video To set the context for the debate and to examine potential policy implications for pressing social questions, McKinsey’s Rik Kirkland conducted a series of interviews in January at the World Economic Forum’s annual meeting in Davos. Workforce at risk? Erik Brynjolfsson: In our book, we call it the great paradox of the Second Machine Age.

The consequence of growth Gini coefficient The Gini coefficient (also known as the Gini index or Gini ratio) (/dʒini/ jee-nee) is a measure of statistical dispersion intended to represent the income distribution of a nation's residents, and is the most commonly used measure of inequality. It was developed by the Italian statistician and sociologist Corrado Gini and published in his 1912 paper "Variability and Mutability" (Italian: Variabilità e mutabilità).[1][2] The Gini coefficient measures the inequality among values of a frequency distribution (for example, levels of income). A Gini coefficient of zero expresses perfect equality, where all values are the same (for example, where everyone has the same income). There are some issues in interpreting a Gini coefficient. Definition[edit] Graphical representation of the Gini coefficient The graph shows that the Gini coefficient is equal to the area marked A divided by the sum of the areas marked A and B, that is, Gini = A / (A + B). Calculation[edit] Known distribution function[edit]