Note: Other posts in this discussion are available under the tag “inflation debate“. With the trade-off between inflation and other things behind us, and a justification for inflation targeting, we have a good base to discuss current activity and issues. The aim is to now discuss other methods of fighting inflation – however, before discussing […]
So the Reserve Bank has cut interest rates. If you normally read this blog you will know that this disappoints me – and I am grateful that both of you understand the pain I’m going through 😉 There has been a lot of commentary on the Reserve Bank’s decision, which I will link to before […]
So the Reserve Bank cut interest rates to 8.0%. The only new information that has come out since June is a higher inflation outcome as a result of larger than expected increases in petrol and food prices. Furthermore recent increases in funding costs have helped to convince the Bank to cut. Even ignoring inflation, it […]
Cactus Kate states that men should pay the bill when taking a woman out – because of the substantial expenses associated with being a woman. As an economist, I’m not so sure if this does it – after all, aren’t these all sunk costs, which implies that they shouldn’t have any impact on the final […]
Back in 1970 George Akerlof wrote “The Market for Lemons”, where he described a game where if, buyers have less information than sellers, it is possible that mutually beneficial trade may not occur. (Wikipedia) Now I’ve noticed a bunch of my favourite economics blogs discussing this paper by Arif Sultan, on empirical evidence and the […]
When justifying progressive taxes or any type of transfer people often use the idea of diminishing marginal utility. Now I am not against transfers, I think there are many good reasons justifying transfers, however DMU is not one of them. We’ve discussed issues with this approach before here and here. Fundamentally these were: The utility […]