Category Global Economy

What’s the IMF?

My answer on Quora: The International Monetary Fund (IMF) is a multilateral/international institution whose primary purpose is to be a lender of last resort to member governments. If one of its member countries is having a financial, banking or related crisis, or is about to have one, the IMF is there to lend that country’s […]

What is the optimal home ownership rate in the US?

My answer on Quora: I think this question just gave some economist out there an idea for her next paper, because, to my limited knowledge on this literature, there do not seem to be many studies that try to answer this question. There may be a reason for that and that reason could be methodological […]

How is China preparing for the expected rapid aging of its population?

My answer on Quora: At least one way China hopes to address some of the needs of its aging population is by providing households with safe financial assets to invest in. The more options available for households to finance (at least part) of their own retirement, the less pressure on public pensions and the more […]

What is your favorite economic principle?

My answer on Quora: Thinking at the margin! The principle here is that decisions are made when considering one step ahead. What impact will this extra move have on X? Will one more A result in B? What would it mean for my budget (or time) if I buy Y instead of X? This kind […]

What is the difference between human and economic development?

My answer on Quora: When economic development is inclusive, the two can be thought to go hand in hand. This is largely because there is no precise definition of economic development. For example, take the Cambridge Dictionary’s definition: The process in which an economy grows or changes and becomes more advanced, especially when both economic and social […]

How does the government generate revenue besides collecting taxes?

My answer on Quora: For a given country, you can find the actual breakdown of its government’s revenues in the Statement of Government Operations (p. 38, IMF). This is like the government’s income statement. Some governments might give it different names and some governments might be more transparent than others. A government’s revenues can be grouped into […]

When inflation is running wild, what should governments do to the interest rates?

My answer on Quora: It depends on the source of inflation. Interest rates impact borrowing/savings decisions and can also send a signal about the seriousness of the central bank (whose mandate typically includes some kind of price stability). If inflation shoots up because of a supply shock, then there may not be much interest rates […]