Category Quick Posts

What are areas where economies of scale do not hold up?

My answer on Quora: Economies of scale are not always true for ever-increasing levels of production. Sometimes, a company can get too big and begin to experience diseconomies of scale where the cost of producing an extra unit begins to rise. Economies of Scale Most companies start off with economies of scale, where they get more efficient […]

What are the different markets in economics?

My answer on Quora: A market is for anything that has someone who wants something and someone who provides it. Or, where a transaction takes place. A stock market is where people buy (want) and sell (provide) stocks. Stocks are bought and sold in different “exchanges”, like the New York Stock Exchange, Nasdaq, or the Bombay Stock […]

Can pessimism on the economy actually help trigger an economic decline?

My post on Quora: More broadly, expectations can play an important role in economic decisions and can sometimes be self-fulling. Economic Decisions and Expectations From the demand side, an economy can be thought of as a series of spending, saving, borrowing and investment decisions by people, companies, investors, national governments, city councils, etc. These decisions can be […]

Why is the employment-to-population ratio still low despite the very low unemployment rate in the U.S.?

My answer on Quora: This is one of the biggest labor market questions and challenges in the U.S. economy. The straight answer is that the labor force participation rate sharply declined for years after the 2008 financial crisis before finally stabilizing in 2016. The real question is why fewer people are participating in the labor force. An […]

Will the world eventually come to an equilibrium where all nations will be developed and everyone will be out of poverty?

My answer on Quora: In the United States, the preamble to the nation’s constitution begins with “We the people of the United States, in order to form a more perfect union…” The idea of “a more perfect union” underpins the ultimate goal of the nation as defined from its inception: to become more perfect with every generation, […]

Why is the US dollar still the currency that matters the most globally?

My answer on Quora: Of all the currencies around the world, the US dollar matters the most globally because it is most readily available, most widely accepted in international transactions, and, crucially, the most trusted. If little country A is selling a commodity, for example, to little country Z, that transaction is most likely to […]

What is the benchmark used to measure the effectiveness of monetary policy?

My answer on Quora: There are different indicators one can look at to help assess if the monetary policy of a central bank is effective or not, but such assessments have been getting harder to make. On the surface On the surface, a central bank can be viewed as effective in its monetary policy if […]