Microeconomics |
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...
Microeconomics |
Normal, Inferior, Neutral, Luxury, Necessary Goods There are three fundamental questions about a consumer’s consumption response: 1. How will demand change for a good i change in response to a increase or decrease in the price of i? 2. How will demand for good i...
Macroeconomics |
Economics: The Study of how society deals with scarcity. Here is a brief article on the introductory components of any economy with a macroeconomic slant. In the economy we expect to find these four components: resource endowment, technology, preference, institutions....
Foreign Exchange |
Not that they can’t, but why would it be bad policy to raise government revenues by issuing bonds that are then sold to the monetary authority? Here are some thoughts in relation to a fixed exchange system and a floating exchange rate system. There is an...
Global Economics |
A 25 page paper from Paul Krugman (draft of his lecture for the Picciotto Prize): What Have We Learned From The [2008] Crisis? Paul Krugman September...
Banking |
Here is a brief explanation on the nature of clearing drains and currency drains. The applications include part of how banks lend and settle account between each other. Put yourself into a context of the major banks and how they move their money between each other and...
Personal Finances |
Here is a brief example that explain the impact of interest rates. We’ll assume two periods for simplicity sake. Period 1 (Year 1) will be the CURRENT period, and Period 2 (Year 2) will be the FUTURE period. Other notes for this example: A consumer who earns...
Macroeconomics |
This article continues on from a previous entry in our macroeconomic blog category called Balance of Payments explained. This article provides an example of the national income accounting scheme in action within an open economy. Comments are always welcome. Remember...
General |
If you’ve ever taken Econ 101 then you’ll recall in the first-class this simple principle. The entire economic system relies on the foundation of supply and demand. This in turn produces scarcity. The more scare a product or service, the higher the price...
Macroeconomics |
The Bank of Canada announced that it is maintaining its target for the overnight rate at 1/2 per cent. The Bank Rate is 3/4 per cent and the deposit rate is 1/4 per cent. Although inflation is heading back to a 2% target by next year, the global economy continues to...
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