Tag Archives: economics

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 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 did John Maynard Keynes get right about economics?

My answer on Quora: Two things: 1) Fiscal Policy Very simply (and very broadly), Keynes established that fiscal policy can play a role in managing aggregate demand. In plain English: government spending (whether it’s increasing or decreasing) can help the economy from getting too hot or too cold. When it is too hot (resources (capital […]

Competition Challenges in the Digital Economy

From Brookings (with Nirav Patel): Slow productivity growth and rising income inequality have shaped the world economy in a time of rapid technological change. A variety of explanations have emerged to help us understand these related trends, but one overarching theme is the decline in competition. The combination of increasingly concentrated markets, rising market power of large firms, and […]

Why do people have such strong political opinions about economic issues? If we knew what works economically, why wouldn’t all people already support that?

My answer on Quora: Two key points stand out to me on this issue. The first is on what we know about the economy. The second is on how we talk about the economy. We do know a lot about the economy, but we don’t always know what the best way forward is. This is […]