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Sep 18.09
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Personal Finances
/ by Ro Econ
Great dialogue about pensions and the sweet spot to invest. Moved from the forum by Mr. English:
Hi all,
I'd be interested to hear what everyones take on pensions is the merits etc and the negs.
My position is that they are a scam whereby the bankers use the money that is invested to play the OPM ( other peoples money ) thing, with , I imagine the final figures having some kind of government backed insurance to cover the risk from the investments they are making with the contributors pension money. The government tax incentive obviously lightens the treasury burden for government pensions hence the tax break but I also think there is an ulterior motive for it. That said I was toying with the idea of a sign in name of The Conspiracy Kid, but for me this is the likely answer of pensions.
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Sep 17.09
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Personal Finances
/ by Ro Econ
Canadian tuition costs pale in comparison to their US counterparts, however, American student have more options. With the tuitions increasing, and many more universities/colleges to choose from, American students have some options to cut their tuition by thousands. How you say? Simply, head over to the 'dreaded' college, the local community college, and take credits for transfer to University.
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Sep 17.09
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Uncategorized
/ by Ro Econ
Goodbye DiscussEconomics Forum
We're saying goodbye to our economics forum that's seen more popular days. We'll be migrating most of the content to the blog. However, that's not the end of the forum entirely. We've crunched it down to two categories and the one you need to know about is the, "ask an economics question" section which we'll be keeping.
We wanted to maintain some element where students and interested browsers could post questions and have the community respond. You can find the link to the economics questions forum here.
Apart from th at, from now on you can comment immediately on articles within the blog itself. So really nobody is losing anything! Thanks to all those who participated, it was a slice. !
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Sep 10.09
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Global Economics
/ by Ro Econ
Canadian merchandise imports and exports both increased in July as a result of broad-based growth in volumes. The spike in imports were largely attributed to fuel and aircraft. Imports were up 8.3% to $31.7 billion while exports grew 3.3% to $30.3 billion. As a result, Canada registered a trade deficit of $1.4 billion in July compared with a trade surplus of $37 million in June.
The gain in imports stopped 4 months of decline and was the result of an 8.7% rise in volumes as prices edged down 0.4%. Although the increases were widespread, machinery and equipment, automotive products and energy products were the main sources of growth.
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Aug 26.09
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Debt Management
/ by Ro Econ
Bankruptcies Increase by a Third in July 09
American bankruptcy numbers have arrived for July 2009 and the results aren't good, but then again good news wasn't expected. Total bankruptcy claims comparing July 2009 to July 2008 increased by 35%. The news certainly is correlated with the recent announcement of July 2009 unemployment data that saw the rate marginally decrease from June's 9.5% to July's 9.4%.
The increase in unemployment post-recession, coupled with the decrease of home equity, among other factors, has contributed significantly to the bankruptcy claim rate. The July total of 1,306,315 claims is in the middle of the pack when it comes to historic numbers (comparing the past five July's).
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Aug 24.09
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Microeconomics
/ by Ro Econ
Continuing on with demand theory. Previously we discussed the Cobb Douglas function, now we move into perfect substitutes and the corner solution. Here are some factors to keep in mind.
1. Indifference curves must interest one of the axis (not necessity or essential good)
2. Budget constraint line is such that the slope is greater than the MRS (marginal rate of substitution) (MRS x1, x2) good 2 for good 1 at the intercept (M/p2).
For example: Perfect substitutes: the solution --> spend your entire budget on the cheaper of any two goods to maximize utility. This is mathematically express like:
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Aug 21.09
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Microeconomics
/ by Ro Econ
The assumed goal for consumers is to reach the highest attainable indifference curve (or the highest utility) subject to their budget constraint. In an formulaic expression:
Keep in mind these assumptions: non-satiation still holds true (that more is better); to reach maximum utility the individual spends all their money (a point on the budget line).
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Aug 19.09
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Microeconomics
/ by Ro Econ
In the past installments from DiscussEconomics on demand theory, now we're venturing into the graphical and mathematical expressions of the Cobb Douglas demand function.
Graphically expressed (utility maximizing) with the assumption well-behaved preferences.
The interior solution characterized by two statements (the equals sign is really supposed to be three lines thus 'is equal to):
1. p1x1* + p2x2* = m
2. MRS (x1*, x2*) = p1/p2 (Left side is the slope of the indifference curve; right side is the slope of the budget line)
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Aug 17.09
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Microeconomics
/ by Ro Econ
Welcome to the next section following a discussion on utility and indifference curves (preferences of consumers). We are now into a discussion on demand theory; the previous posts are linked chronologically at the bottom of this post.
Demand theory wants to explore the concept of: given constraints we must make choices among competing alternatives.
Budget Constraint in formulaic expression:
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Aug 13.09
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Microeconomics
/ by Ro Econ
The following section from DiscussEconomics on microeconomics and preferences discusses the mathematical representation of preference using utility functions.
Using utility function : U(x) = U (x1, x2, x3.......xn)
(Where U is in fact mu.)
This assigns a number (utility number to every consumption bundle in a person's preference ordering. 1. Now if someone is indifferent between two bundles, the U function assigns the same number to both bundles:
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