Category : Economics

Dutch Auction Shops

Japan have been struggling for some time with poor aggregate demand in their economy. The interest rate has been near zero (and actually zero at some points) for a very long time to try and stimulate borrowing and investment. I saw an interesting programme on NHK World (Japanese news channel) a few weeks ago. It was about consumption and consumer attitudes in Japan. Lots of things both surprised and intrigued me, such as the fact that the youth of Japan […]

Cost Curves and a Nice Proof

As I like to do before getting down to some hardcore maths, I’m going to take an artistic break and present to you a Haiku that I wrote a couple of days ago: The flower withers Petal falls on wilted earth New shoot takes its place There, that’s enough of the artsy fartsy stuff for now. What’s all this about? I will firstly explain briefly what cost curves are, and why they look like they do. I will then go […]

Present Discounted Value

Before we get down to the maths, let me digress to explain why there is a still from BBC’s motoring magazine Top Gear at the top of this page. In the last few series of the show, I have noticed an interesting tendency for BBC to include attractive women in the camera shot whilst the presenters are sitting in the foreground. The image above shows a prime example of this. Whether this is a conscious attempt at subliminal messaging targeted […]

Cash or Ticket?

I’ve been a boyhood fan of Michael Jackson, and so will not comment on his life or death out of respect – other than to say he was an inspirational artist in many ways. However, the situation with his concert tickets caught my eye as an interesting application of game theory. Just to set the scene, MJ had planned a series of concerts at the O2 Arena in London. 50 days were promised, and with a capacity of around 20,000, […]

Coffee? That will be one billion dollars, please

Annual (hyper)inflation in Zimbabwe, according to one source, has reached 500 billion percent. Many estimate it to be even higher. That’s 500,000,000,000%. That means that prices increase roughly by 50% every week. So essentially, your savings will be worth nothing in a few months. In fact because of this, the Zimbabwean Dollar has now been taken off the market, with the South African Rand being the primary currency in Zimbabwe at the moment. Unfortunately, this doesn’t solve anything for most […]

The Equation of Exchange

The fact that economics is a complex subject is no secret. With things as they are in the world at present, analysing and breaking down what exactly is going on is fairly difficult. At times like this, it is always handy to be able to delve into a theoretical toolkit to see if there are any age-old concepts that can help us understand situations. On that note, I sure have a delight for you… MV≡PY A wonderfully simple, and yet […]

Money Matters

Something I’ve heard a lot of people talk about recently (and a general sentiment shared by people in times of financial difficulties) is how money is ‘evil’ and seems to be the root of everyone’s problems. Unfortunately, it is quite easy to forget the role money plays in an economy, and also quite easy to forget the fact that money has come about due to a need for it to make life a whole lot easier. The Roles of Money […]

Calming the Crisis

I’m sure you are all aware of the condition the world economy is in at present (ie. bleak). And so, I won’t talk about how all of it transpired, but I want to look at the various different effects that have been observed, and suggest possible ways of tackling the problems that they raise. The ‘Credit Crunch’ and Lending The financial sector has been at the heart of the downturn. In a nutshell, because confidence was high and people were […]

All you can eat… is not very much

I love the Pizza Hut buffet. It’s £4.99 for all the pizza you can eat – although drinks are not included, which is one of the ways they make their money, obviously. What’s the other way they make their money? Well, I’m sure the £4.99 price tag didn’t come from just anywhere. They know that the average person only consumes a certain amount of food before they are satiated, and so they would have calculated that people are unlikely to […]