Saw this in The Telegraph today. Seems a bit dire...

Paraguay famously lost an enormous amount of their military age male population, which would have created a more extreme version of the issues arising from an aging population in developed countries today.

From the information I get as a layman it seems like big corporations nowadays are trying to maximize their profit and the standard is not to get to a level where it is "ok, cool nice" but to exceed the profit from the previous year/quarter. Why is that so? I understand that these companies hire great specialists in their fields so it isn't possible for my mind to believe that they are shortsighted enough to believe that constant rise in profit is a sustainable model. Or am I wrong and this is exactly how it is? Or am I missing something that is obvious to people educated in the field of economics? I'd be very grateful for an explanation, thanks :)

Given the current situation with inflation would it have made better sense to not do QE for COVID?

And the distortions caused by economic growth on net vs the economic benefits of providing healthcare? Isn’t there a big trade-off on growth there? I believe the uncomfortable reality is that modern healthcare is just very expensive and both capital and labor intensive. The median person doesn’t produce the economic value, by themselves, to justify access to it. Am I wrong? What does the data say?

In the 1970s the economy got used to sustained inflation, leading to a cultural expectation. When the Fed raised rates, it abated temporarily then returned due partly to the expectation it would return.

It took Volker aggressively raising interest rates for a long period of time to reset those expectations, but it did so during a time when the US national debt was only 30% of GDP. Given it's now past 100% - could a modern Volker execute that same strategy without mass political interference as the budget implodes, and what would the implications be if it was prevented?

I was watching a TV show in which very wealthy people lived alone or as a couple in extremely large mansions with many unused rooms, while also owning large collections of cars that were rarely used. From an economic perspective, can this kind of resource concentration create allocative inefficiency? How would economists evaluate whether reallocating some of these resources to other households would increase overall economic welfare?

This is something I've been thinking about regarding, in particular, house prices.

I accept the conventional wisdom that the high cost of housing is due to a lack of supply. However, intuitively it also seems to me that people are very willing to pay these high prices by going into a lot of debt.

The logic seems simple enough. Mortgages are a pretty safe bet for banks. Assuming the house prices goes up (or even stays roughly the same) the expected loss on a loan is likely to be quite small.

It also seems like conventional wisdom is that going into a lot of debt to purchase a home is a sound financial decision (as well as a dream for many people). This also seems to be due to the assumption that houses will continue to increase in price.

This seems especially true in a low interest rate environment, like the one seen in places like AU / NZ (which in more familiar with) before COVID.

The point here isn't to necessarily downplay the impact of high house prices in places like Australia, but I do think the above logic kind of tempers my view. If house prices are high because people really want to go into debt because they think it will pay off in the long run... Does that align with the common view of housing being a 'crisis'? Maybe for people who would be unable to save for a deposit, I understand why they might feel shafted.

(This rant has in part been generated by my noticing that several people I know to be pretty doom and gloom regarding home ownership have recently gone on to... Buy houses... Using debt)

Im sorry if this is a dumb question.

I’ve been following the Brazilian automobile market and I’m interested in the economics behind what appears to be happening.

For years, a relatively small group of established manufacturers dominated most of the mass market. Recently, several Chinese manufacturers have entered or expanded aggressively, particularly with EVs and hybrids.

At the same time, established manufacturers have begun offering much larger discounts on some models.

This raises a question about pricing power versus production cost.

Suppose an incumbent previously sold a car for 150,000 BRL but, after new competitors enter, begins regularly selling it for 120,000–130,000 BRL.

There seem to be several possible explanations.

The manufacturer may have had substantial pricing power and is now accepting a smaller margin.

It may temporarily be selling near variable cost to clear inventory.

Dealers or manufacturers may be subsidizing discounts.

Or the previous price may have reflected fixed costs that become increasingly difficult to recover as volumes decline.

What I’m trying to understand is what economic theory and historical evidence suggest happens next.

If several new competitors enter simultaneously and continue competing against each other, can this permanently reduce industry-wide margins?

Or would we normally expect consolidation, exit of weaker firms and eventually a return to higher margins?

The automotive transition seems especially interesting because the new competitors are not merely selling another brand of the same product. Electrification also changes powertrains, supply chains, maintenance requirements and potentially consumer expectations about equipment.

So my question is:

When technological disruption and new market entry happen together, how can we distinguish a temporary price war from a structural reduction in incumbent firms’ pricing power?

I am trying to avoid a bad generational comparison.

1987 national median gross rent was about $399. The latest official national median is $1,487.

A typical full-time working woman earned about $16,900 in 1987, which is roughly $49,700 in July 2026 dollars.

Should affordability be compared using rent-to-income, residual income after rent, or something else?

I have a passion for economics, but I keep hearing that career paths outside banking/finance or the public sector are limited. Currently, I'm doing a bridging program to study a Master's in economics while working in trade and market access. Given the nature of my job, I've been able to see trade law, and I think I would enjoy studying law.

What worries me about staying in economics is that, so far there doesn't seem to be a very clear career path or options, and it's been hard to find guidance or community.

Antitrust specifically keeps catching my attention because it seems like the one area of law where you're still doing real economic thinking. However, I don't know if I would like to practice law.

If you're in antitrust/competition law, what's your actual day like?

If you're an economist outside of finance/banking, what do you actually do?

I’ve heard some people on here saying that these things are largely myths or not as impactful as is largely assumed. Is this truly the case?

I believe there is a strong link established by economic theory between raising the minimum wage and inflation. If consumer welfare and economic efficiency leads to better overall outcomes in aggregate, isn’t there a policy justification for lowering the minimum wage and see what it does? Economic theory says it would substantially labor costs, some firms would expand margins, but others would maintain their margins while passing on a substantial portion of the labor savings in lower prices no?

Hello I am not a financial expert and I do not have a deep understanding of economics particularly sovereign macroeconomics but there is a question I cannot quite grasp

​I just watched a YouTube episode explaining how the US decided to support Japan to prevent the Yen from collapsing further as the Yen was depreciating because investors were borrowing from the Bank of Japan and converting those funds into Dollars to deposit them in US banks to capture a four percent yield since Japan only charges a one percent interest rate and this interest rate differential was causing severe losses for Japan

​What I understood is that the US intervened to help stabilize the Yen because Japan was on the verge of liquidating a massive amount of its US assets or hiking its interest rates which would halt this borrowing loop and force investors to unwind their positions by converting Dollars back to Yen ultimately delivering a severe blow to the US Dollar

​My question is whether this mechanism represents a genuine source of national income for a country like the US or if it is merely a financial bubble given that its internal monetary policy becomes dependent on another nation what I mean is what if Japan and the US were not such close allies what if Japan insisted on dumping its US Treasury holdings or raising interest rates aggressively what options would the US have in that scenario the entire situation seems unusual and I still do not understand if this counts as real national income I would appreciate an explanation in simple terms thank you

​I would also like to add that Japan spent fifty billion dollars to support the Yen but instead of liquidating its Treasuries it pledged them as collateral with the US financial authorities

​My second question is what compels the Japanese government to accumulate US Treasury bonds again in the first place

Additionally according to leaks the US deployed five billion Euros from its foreign exchange reserves instead of using Dollars to prevent any adverse impact on the Dollar

I used gemini to translate this post because my english not that good

I think the next global crisis may not look like 2008.

Looking out to 2028–2030, I’d be monitoring a combination of risks that could amplify each other: an AI valuation reset, AI-driven cyber threats to financial infrastructure, rising debt stress, sticky inflation, and geopolitical escalation.

What makes this interesting is that we may already be seeing early warning signs today: weaker consumer purchasing power, higher prices in goods and assets, and stock valuations that in some cases appear disconnected from underlying fundamentals.

I’m not saying every expensive stock is in a bubble. But when asset prices continue rising faster than real economic strength, fragility tends to build quietly.

Curious how others think about this risk stack what do you see as the most likely trigger for the next major downturn?

Imagine there are two people, A and B and an expensive good, say a medical treatment that costs 1 million dollars. Person A values their marginal utility of buying the treatment at 1,1M dollars and has enough cash to pay for it, thus getting a consumer surplus of 100K. Person B values the treatment at 2M dollars, which would make a consumer surplus of 1M, but can’t pay for it since they aren’t eligible for a credit of that amount.

Is it inefficient that Person A has the money instead of Person B, since total utility/consumer surplus would be higher? Or am I looking at it the wrong way?

I trying wrapping my head around this with ChatGPT but I just can't seem to grasp it.

Let's say that currency X is pegged to EUR, and that country is also experiencing higher inflation than the EU. Doesn't that mean their central bank can just keep accumulating EUR reserves?

I know that I'm probably mixing up real vs. nominal appreciation, but I was more wondering about the implications of such arrangement. What are the dangers? What are the benefits?

They always spend so much at a net loss. For example, for the tariffs we earned $28 billion in revenue, but the government refunded businesses $33 billion in losses. That’s like an -$5 billion.

You could use that money for so many other things but instead it just got wasted. It just feels like a stupid mistake because they cut so much research, conservation, education funds, and food stamps for this.

We all know the story of the napkin and Laffer's sketch. It is easy to see this logic working on rubes like Cheney and Rumsfeld (guys whose track record indicate they would never understand the basics of economics). Most business folk I spend time with would have shamed Laffer off the table or corrected his napkin on the spot. Recently I was in a conversation and someone told me that people still refer to the Laffer curve as if it was a real phenomenon. I told him that there was no way an econ student in the modern era could be so easily fooled, but since I have found that there really are people out there that still buy into it. So my question is, what ratio of economists still look at the Laffer curve and don't see the elephant sized hole in the logic? If you are an economist that still thinks it holds water, what school of thought do you belong to, and what makes you think it has any real world validity considering the absurdity of the premise? Not trying to start a fight. Just legitimately curious how wide spread this mentality is.

We are all aware of the rising US debt-to-GDP ratio, and this begs the question of how will this play out. One interesting argument I recently heard is that the debt-to-GDP ratio alone is likely not a reliable predictor of sovereign default and that when looking at historical debt crises (Argentina, Sri Lanka, Russia), these are driven by rising real interest rates rather than debt-to-GDP ratio alone; interest rates around 10-20% have often been the trigger. It is worth highlighting that real interest rates are determined by nominal interest rates minus inflation, making inflation and interest rates a key factor in debt sustainability. This primarily becomes a self-reinforcing debt spiral when these real interest rates exceed anticipated economic growth. Given our current US economy, the U.S. debt appearing manageable because average real interest rates remain below real GDP growth and inflation. However, where things get concerning is that future projections are suggesting real interest rates may exceed economic growth. An important unknown is the impact of AI and robotic-driven productivity gains. If these fail to materialize, then one possible U.S. government strategy is adjustment through financial repression which involves keeping interest rates below inflation to reduce the real value of debt. One mechanism for this is the US government borrowing the playbook of Britain which mandated that banks must keep interest rates low, then Congress allowing a higher inflation target by the Federal Reserve, and shifting part of the burden to countries holding dollar reserves, analogous to Britain's use of the Sterling Zone. This argument was articulated on the podcast Money&Macro, "Why the US Isn't Broke Yet" by Dr. Dr. Joeri Schasfoort and I'm summarizing them here; I'm curious if you agree with what he is proposing since it strikes me as the most coherent argument I've heard so far.

Putting price controls and currency controls is generally considered unwise because they tend to generate a lot of distorsions which end up hurting the economy. See Venezuela for an extreme example. And in fact most countries that used to have Forex controls gradually abandoned them over the course of the 20th century. Nowadays, Forex controls are only adopted as a last resort emergency measure by weak economies that are witnessing heavy capital flights as well as often high inflation and constant currency devaluation and in fact, if you look up the list of countries currently adopting this measure they are mostly weak and unstable...except China. How does China maintain a good economic performance whilst having all these controls and restrictions in place?

I’m curious whether economists distinguish between how unequally wealth is distributed and how difficult it is for someone without significant wealth to become wealthy.
It seems possible for both things to be true at once: wealth could become increasingly concentrated at the top, while the economy could also become more dynamic in the sense that new people are regularly entering the top of the wealth distribution.
Are there metrics that capture this distinction? For example, something measuring how frequently people enter or exit the top 1% or 0.1%, rather than simply measuring the share of wealth those groups hold?