The Rationality of Irrationality
Reinhard Selten, 1994 Nobel prize and founding father of experimental economics, predicted that individuals wouldn’t play the conventional Nash Equilibrium in the Ultimatum Game, better known as a take-it-or-leave-it offer. This was proven to be accurate when his student Werner Güth showed this supposedly irrational behaviour in his 1982 experiments. In game theory a Nash Equilibrium is a scenario where neither player would benefit from … Continue reading The Rationality of Irrationality
The Covid-19 Crisis: Emerging Markets Hang in the Balance
“All countries need to work together to protect people and limit the economic damage. This is a moment for solidarity.” Kristalina Georgieva Managing Director and Chairwoman of the IMF The COVID-19 crisis has already left some of the world’s most advanced economies in dire straits. News outlets have been quick to cover the stringent lockdowns and plummeting markets of the developed world. However, media coverage … Continue reading The Covid-19 Crisis: Emerging Markets Hang in the Balance
Rent-seeking and Inequality
26 billionaires own as much as the world’s poorest 3.8 billion people – perhaps unsurprising given how little the poor in developing countries own. Inequality is widely accepted as not only inevitable but desirable to an extent, to incentivise innovation and productivity, but in OECD countries it is at the highest level for the past half century. Those at the top of the income and … Continue reading Rent-seeking and Inequality
Running for Cover: Insurance and Covid-19
The Olympics, Wimbledon, The British Open. Just a few in a long list of global sporting events that have been postponed indefinitely or cancelled due to the global outbreak of Covid-19. The impact on athletes, coaches, staff and even spectators has been significant. Furthermore, this pandemic has led to devastating losses for the various financial stakeholders of these events, such as sponsors and organisers. However, … Continue reading Running for Cover: Insurance and Covid-19
Lost Potential: School closures’ devastating effects
All over the world, schools have closed down as part of strict lockdown measures designed to slow the spread of Covid-19. According to UNESCO, over 90% of the world’s pupils have been affected by these closures. Yet for such drastic action, the supporting evidence is at best dubious. Studies have shown that school closures will do little to halt the spread, with UCL calling it … Continue reading Lost Potential: School closures’ devastating effects
The Rise of Automation: Why it will be different this time
In the past, technological innovation had led to higher worker productivity, which led to rising wages, which led to increased purchasing power for workers, which led to higher demand, which led to more innovation to meet that demand. Innovation has made our lives easier. With the Industrial Revolution, people shifted into factory jobs from agriculture and as automation became more advanced, humans again shifted, this … Continue reading The Rise of Automation: Why it will be different this time
“Good Economics for Hard Times” by Duflo and Banerjee
Good Economics for Hard Times is the second general readership publication of the husband and wife, Nobel-prize winning pair of Duflo and Banerjee. Their first book, Poor Economics, published in 2011 (and already reviewed on Etonomics), catapulted them into global fame and their second instalment continues in the same rigorous, empirical style as the first. They aim to transfer their methods of studying poor countries … Continue reading “Good Economics for Hard Times” by Duflo and Banerjee
The Hyper-Digitalisation of Covid-19
“A reminder that the virus does not discriminate, we are all at risk.” These were the words UK Cabinet Office minister Michael Gove presented to the public when Prime Minister Boris Johnson tested positive for coronavirus. Covid-19 may not discriminate but it certainly impacts individuals, companies, and countries differently, for better or worse. Despite the unrelenting news about suffering and hardships as countries struggle to … Continue reading The Hyper-Digitalisation of Covid-19
China’s Stranglehold on Rare Earth Elements
China’s quick recovery from Covid-19 has sparked concerns about the country’s increasing geopolitical power. The crisis has exacerbated anti-Chinese rhetoric which has encouraged Western firms to lessen their reliance on Chinese goods and services. However, somewhat worryingly, this isn’t possible in one increasingly important market: the market for rare earth elements (REEs), which plays a crucial role in the production of most electronic goods- everything … Continue reading China’s Stranglehold on Rare Earth Elements
“23 Things They Don’t Tell You About Capitalism” by Ha-Joon Chang
Why free-market capitalism doesn’t work, according to Ha-Joon Chang How liberal or restrictive governments should be on economic and trade policy has been debated extensively. Theoretically, free-market ideology most efficiently allocates resources. With an invisible hand guiding the market forces of supply and demand, while also stating that firms ought to have unlimited freedom, they know how to produce goods and services most efficiently, which … Continue reading “23 Things They Don’t Tell You About Capitalism” by Ha-Joon Chang
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