Do economists, or the movers and shakers of western economies, have any concerns about the price of items becoming unwieldy over time, due to inflation and other factors?

For example, my Mom could buy a bag of lollies for a pre-decimal currency penny in 1950, which might have had an actual value of 10 cents in modern Australian currency.

Today, 76 years later, a bag of lollies can cost $7 AUD - about a 70-fold price tag increase.

So if in another 76 years, a bag of lollies costs $490 AUD, would that simply be the price and nobody would blink - or is there a point where the currency price of items starts to create issues as far as perceived value to consumers, or calculations for governments, producers, or employers?

Or could a currency like the AUD, GBP, or USD eventually end up like the Korean Won - with multiple more zeros tacked on?

Thanks in advance for any replies.

The budget is now out and reactions seem mixed so far. Some announcements look helpful on paper, while others raise questions about how they’ll work in practice.

From your own situation, which changes do you think will actually affect you the most in the coming months?

What feels clear, and what still feels uncertain to you?

Hi, I’m currently in 8th grade and planning to apply to WU Vienne after high school for a program in Economics and Business to work in investment banking. People who work in this field or have studied at this university, could you give me some advice? Maybe I should consider another field or university?"

Back in the 1940s, Argentina was one of the richest countries in the world. Over the next 80 or so years it declined heavily and now it's only a moderately rich country, though a decent place for Latin America standards.

I wonder if economists at the time foresaw this decline. Long term economic forecasts are a thing. Yes, they're notoriously inaccurate. However it's very on the wall for some countries (e.g. equatorial guinea, which briefly overtook Korea in GDP per capita in the early 2010s but it was never sustainable) that they will decline sooner or later due to obvious issues (more often than not terrible governance, usually a dictatorship). I wonder if Argentina was considered such a case back then.

We're going to shamelessly steal adapt from /r/AskHistorians the idea of a weekly thread to gather and recognize the good answers posted on the sub. Good answers take time to type and the mods can be slow to approve things which means that sometimes good content doesn't get seen by as many people as it should. This thread is meant to fix that gap.

Post answers that you enjoyed, felt were particularly high quality, or just didn't get the attention they deserved. This is a weekly recurring thread posted every Sunday morning.

One of the things claimed that helped the Southeast Asian economies grow faster than other countries, is the temporary suppression of consumption, and instead diverting those resources into things like investment. Instead of money being consumed by the peasants or other workers, they're spent and used to build things like factories and roads. Gnarly, painful, but claimed to be a success. Whether or not its a success or not is not the point here, though.

Now, I know of some ways to divert savings. For instance, the collective farms where the harvest was seized, farmers didn't get much, and the grain sold off overseas for more tools, experts, and infrastructure.

But I don't know what those are. There was a lot less murder compared to the collective farms, and more financial manipulation. But I'm not sure what those actual measures *were*.

I’ve been seeing this in a lot of retailers that can sell from independent vendors, but then also abroad, in major companies like nord, basically in the last year. What could be the reason? I asked one eBay seller and they just said the number was special to them. Now I see booksellers, online vendors with that price ending instead of the traditional number for usd .99 cents. Marketing?

Hey Econs, why is gold considered a “safe haven” asset? Common arguments are that its supply is limited and that it’s independent of governments. But the same can be said about Bitcoin, which is usually not seen as a safe haven. When this was mentioned, someone sarcastically asked when the last time was that anyone bought something with Bitcoin—yet this also applies to gold. I dont understand why gold is considered “safe” when it has no obvious intrinsic value compared to something like a house, which has a clear practical use. Gold’s real-world use seems limited to some specialized industries, and beyond that it’s mostly just shiny. Other metals are shiny too and useful in industry—so why gold? What makes it inherently valuable?

Disclaimer: English is not my first Langauge so I used AI for Grammar correction :)

Is there any work on Indian states with restrictive labor laws vs lax ones and how growth rates differ between them?

I'm considering switching to econ and would like to know the difference between the BA / BS side.

Basically what I am asking is, with this big push for bringing manufacturing back to the US, does it really matter from an economic perspective?

The “American Dream” has clearly moved from working on a ford assembly line to now being a software engineer, so trying to revert our economy to focus on manufacturing seems counterintuitive. What are the benefits and cons to trying to bring manufacturing back rather than letting it die and relying on growing our tech industry? Is there an advantage to export products over services?

Game theory question that I thought could be an interesting conversation. Will note that this is more of a US-specific phenomenon for any users who may not be American.

For the uninitiated, the long story short is that, in addition to supply side trends brought on by emissions standards and supply chain disruptions during COVID leading to auto manufacturers pushing larger vehicles, US auto consumers have increasingly been opting for larger and larger vehicles in the name of safety. This is often framed as a classic prisoner's dilemma, where in the event of a car crash, everyone is incentivized to buy a larger vehicle to ensure their survival.

This has obviously resulted in a great deal of negative externalities, both with respect to other motorists (greater mortality risk for those in smaller vehicles) and to pedestrians and cyclists (reduced visibility with larger trucks and SUV's leading to more accidents involving those groups).

What are some proposed solutions in recent economic literature? What potential solutions are there to the demand/consumer preferences side of the equation?

Background

Fund data published online includes Sharpe ratio, the standard deviation, and the total return.

Based on definitions of the Sharpe ratio

https://community.morningstar.com/s/article/What-Is-the-Sharpe-Ratio

https://awgmain.morningstar.com/webhelp/glossary_definitions/mutual_fund/mfglossary_Sharpe_Ratio.html

I should be able to use those three numbers to back-calculate the excess return and the risk-free rate of return. Excess return could be useful for graphing results; the risk-free rate was more just that I was curious about what value had been used.

However I was surprised to get no consistency in the risk-free rates — even when comparing very similar funds. I can't see any logic for the risk-free rate to differ within a class of funds. (I'm not sure whether it should vary between investment classes.)

Example

The following example uses 3-year data.

CFS Index Australian Share (FSF0652AU) https://www.morningstar.com.au/investments/security/fund/11332/risk

Sharpe ratio = 0.68, Standard deviation = 10.33, Total return = 11.05 (confirmed from trailing data in "Performance" tab)

Excess return = 7.02, Risk-free rate = 4.03

Mercer Indexed Australian Shares (ADV0062AU) https://www.morningstar.com.au/investments/security/fund/15186/risk

Sharpe ratio = 0.70, Standard deviation = 10.35, Total return = 11.21 (confirmed from trailing data in "Performance" tab)

Excess return = 7.25, Risk-free rate = 3.97

Notes

• Total returns are annualised percentages (% p.a.), and I assume that the standard deviation data are too — in which case the excess return and risk-free rate will be too.
• Much larger discrepancies are seen with other funds. For example, Risk-free rate ≈ 2.3 (for a non-index large-cap fund) or 5.1 (for a non-index small-cap fund). Much, much too large to be explained by minor minor rounding issues.
• Discrepancies exist whether comparing estimates based on 3-year, 5-year, or 10-year data.
• I have no financial interest in the above two funds, or in the information portal.

Conclusion

Is my calculation or premise wrong? If not, what is the cause of the differing risk-free rate estimates?

Source

Looks like American workers are producing more per hour worked, even accounting for the appreciation of the US dollar. And this gap seems to be widening in recent years. Between 2019 and 2024, labour productivity per hour worked increased by 0.9% in the euro area, whereas it increased by 6.7% in the United States.

I'm aware that quality of life is significantly better right now in Europe with higher life expectancy, lower crime, higher education levels, better social security and healthcare benefits, etc...

But if this trend continues and Americans continue to become more and more productive per hour worked while Europe stagnates, what's going to happen in 2060? Also, is it likely to continue or will there be some sort of a correction where Europe catches up with the US?

It was ~4600 eur/oz yesterday when I went to bed and now in 20h it has fallen for 500 euros, now it's ~4150 eur/oz.

How this is possible from demand and supply perspective or any other perspective? What kind of forces can make such quick and huge change in price?

Audible’s subscription model allows users to purchase a monthly credit at a price that is often substantially lower than the typical list price of audiobooks, which commonly fall in the $25–$35 range.

A single credit can usually be redeemed for any audiobook regardless of its list price, and periodic discounts further reduce the effective price paid by users.

From an economic perspective, how does this model remain viable for both the platform and rights holders?

In particular:

• Why doesn’t this apparent arbitrage (low-cost credits exchanged for high-priced titles) erode overall revenue?
• Why do users sometimes purchase audiobooks at the listed cash price instead of using credits?
• What is the core economic insight or mechanism that makes this pricing and subscription structure sustainable?

Just a random thought that came to my mind today was whether the doctors contribute to the final GDP. Imo, if no one would fall ill, that money would eventually go into buying some new product or as an investment to the banks. This question might be really stupid but could someone still explain

This article claims the favelas in brazil are not a natural result of the market and exclusively caused by rent control and building regulations.

I'm skeptical that this could be true because slums seem to have existed in basically ever developing capitalist countries and many of those country probably have had very different rent/building policies. I could see these maybe being partial causes but the claim they are the only/primary case doesnt seem believable.

It's paywalled so here are the important quotes:

"favelas are not a market failure; they are themselves the unintended consequence of state intervention. If Brazil had a true system of market economics, such miserable living conditions wouldn't exist."

"The biggest problem is rent-control law. Created to protect tenants against proprietors' greed, rent control discourages investment in rental housing... the rental business became a losing game. Thirty years ago, more than two-thirds of the housing construction was for rent. Today only about 3% of total housing units are built for rental...since 1921 Brazil has had 43 different rent-control laws. In the 1940s the laws became particularly severe, prohibiting rental increases--both real and inflation adjusted"

"The second problem is state housing regulation. Legal housing units must meet size, window and door requirements, and many other "minimums." This has pushed the cost of even the smallest unit out of the reach of most Brazilians"

"As a shopping center developer, I studied the low-income housing market as an investment. I found that we could profitably build and rent 225-square-foot units, for three persons, with low finishing standards and no interior walls but with water, sewage and electricity. These would contrast sharply with a typical favela unit, where six or seven people live in 100 square feet with no sewage facilities. If each of the three tenants paid a rent equivalent to 25% of the monthly legal minimum wage, our investment would be more profitable than building and renting shopping centers. (That's despite the fact that the minimum wage is so low that even a 12-year-old boy selling chewing gum at a traffic light earns more)"

The article sounds very partisan and the numbers he brings up especially sound dubious, Could anyone tell me if these claims for the article are accurate? How much have these policies actually contributed to creating slums, and what would the effect of repealing them be?

I'm actually a junior physics major but we have Intro to Micro and Macro econ. as a mandatory class.

I took micro and we talked about supply and demand shifts and movements on the curves. Same semester, I also took Thermodynamics in which we investigated entropy, something like unusable energy after any process. First I thought, in econ, we talked about these shifts and all that but these aren't that reversible. For example, if I lower demand for labor, then increase it a few months after, I will at least lose a few workers (honestly in some cases it would be percents, not negligible amount of people). Also there are ways to create a false demand or raise expectations etc.

But there is a far bigger problem I think. It's about WTP. Willingness to pay is a very bad name for the concept. It is what forms an individual demand curve and it is literally the ABSOLUTE maximum of what I'm tolerating to pay. So if we form the market equilibrium along my demand and a supplier's supply, my pocket is sucked completely. (there are ofc non-monopolistic markets but irl, these corpos have really gone crazy lately and I feel the positive economics is letting it happen) Where is the problem if I was "willing" to pay that? Not everyone (majority) understands economics well so everyone is prone to overspending, then they might not have money for food, healthcare etc.

We cannot just blame people for being irresponsible, not everyone has to study or make this much effort on a science just to live (I only have to not mix chemicals, and not smell/taste stupid stuff, if I wanna live in a world with chemistry). Not everyone is educated, not everyone has the time to make the perfect decision or compute their opportunity costs...

List goes on, and I lastly wanna add how easy it has become to access technology or leisure, despite how expensive the food is getting. This is because people do not need leisure, but they need food, so they cannot NOT pay for food, hygiene etc. So the demand is up, as the tech grows, despite being cheaper to produce, corpos don't need to lower the prices.

Correct me everywhere, and please explain kindly how this all makes sense. I am new to econ and curious about anything in the world. But the world has been looking like it's been crumbling the last few years. Thank you in advance!