In economics, a durable good or a hard good is a good that does not quickly wear out, or more specifically, one that yields utility over time rather than being completely consumed in one use. Items like bricks could be considered perfectly durable goods because they should never wear out. Highly durable goods such as refrigerators or cars usually continue to be useful for 3 or more years of use, examples of consumer durable goods include automobiles, household goods, sports equipment, medical equipment and toys. Nondurable goods or soft goods are the opposite of durable goods and they may be defined either as goods that are immediately consumed in one use or ones that have a lifespan of fewer than 3 years. While durable goods can usually be rented as well as bought, while buying durable goods comes under the category of investment demand of goods, buying non-durables comes under the category of consumption demand of goods. Several units may be used to measure the durability of a product according to its field of such as years of existence, hours of use.
The life span of household goods is significant for sustainable consumption, the longer product life spans could contribute to eco-efficiency and sufficiency, slowing consumption in order to progress towards a sustainable consumption. Cooper proposed a model to demonstrate the role of product life spans to sustainable production and consumption. Coase conjecture Industrial organization Pacman conjecture Planned obsolescence Putty-putty
The bond market is a financial market where participants can issue new debt, known as the primary market, or buy and sell debt securities, known as the secondary market. This is usually in the form of bonds, but it may include notes and its primary goal is to provide long-term funding for public and private expenditures. The bond market has largely dominated by the United States. The bond market is part of the market, with bank loans forming the other main component. The global credit market in aggregate is about 3 times the size of the equity market. Bank loans are not securities under the Securities and Exchange Act, bonds are typically not secured by collateral, and are sold in relatively small denominations of around $1,000 to $10,000. Unlike bank loans, bonds may be held by retail investors, bonds are more frequently traded than loans, although not as often as equity. Nearly all of the daily trading in the U. S. bond market takes place between broker-dealers and large institutions in a decentralized over-the-counter market.
However, a number of bonds, primarily corporate ones, are listed on exchanges. Bond trading prices and volumes are reported on FINRAs Trade Reporting and Compliance Engine, an important part of the bond market is the government bond market, because of its size and liquidity. Government bonds are used to compare other bonds to measure credit risk. The yield on government bonds in low risk countries such as the United States or Germany is thought to indicate a rate of default. The primary way to default is to not pay in full or not pay on time, the Securities Industry and Financial Markets Association classifies the broader bond market into five specific bond markets. In the United States, approximately 10% of the market is held by private individuals, amounts outstanding on the global bond market increased by 2% in the twelve months to March 2012 to nearly $100 trillion. Domestic bonds accounted for 70% of the total and international bonds for the remainder, the United States was the largest market with 33% of the total followed by Japan.
As a proportion of global GDP, the market increased to over 140% in 2011 from 119% in 2008. The considerable growth means that in March 2012 it was larger than the global equity market which had a market capitalisation of around $53 trillion. Growth of the market since the start of the slowdown was largely a result of an increase in issuance by governments
An economic system is a system of production, resource allocation, and distribution of goods and services within a society or a given geographic area. It includes the combination of the institutions, entities, decision-making processes. As such, a system is a type of social system. The mode of production is a related concept, all economic systems have three basic questions to ask, what to produce, how to produce and in what quantities, and who receives the output of production. The study of systems includes how these various agencies and institutions are linked to one another. The analysis of economic systems traditionally focused on the dichotomies and comparisons between market economies and planned economies, and on the distinctions between capitalism and socialism, the categorization of economic systems expanded to include other topics and models that do not conform to the traditional dichotomy. Today the dominant form of organization at the world level is based on market-oriented mixed economies.
Economic systems is the category in the Journal of Economic Literature classification codes that includes the study of such systems, there are multiple components to economic systems. Decision-making structures of an economy determine the use of inputs, distribution of output, the level of centralization in decision-making. Decisions might be carried out by industrial councils, by a government agency, in one view, every economic system represents an attempt to solve three fundamental and interdependent problems, What goods and services shall be produced, and in what quantities. How shall goods and services be produced and that is, by whom and with what resources and technologies. For whom shall goods and services be produced and that is, who is to enjoy the benefits of the goods and services and how is the total product to be distributed among individuals and groups in the society. Thus every economy is a system that allocates resources for exchange, the system is stabilized through a combination of threat and trust, which are the outcome of institutional arrangements.
The means of production may be owned privately, by the state, a decision-making system, this determines who is eligible to make decisions over economic activities. Economic agents with decision-making powers can enter into binding contracts with one another, a coordination mechanism, this determines how information is obtained and used in decision-making. An incentive system, this induces and motivates economic agents to engage in productive activities and it can be based on either material reward or moral suasion. The incentive system may encourage specialization and the division of labour, organizational form, there are two basic forms of organization and regulators. Economic actors include households, work gangs and production teams, joint-ventures, economically regulative organizations are represented by the state and market authorities, the latter may be private or public entities
An economist is a practitioner in the social science discipline of economics. The individual may study and apply theories and concepts from economics and write about economic policy. A generally accepted interpretation in academia is that an economist is one who has attained a Ph. D. in economics, teaches economic science, the professionalization of economics, reflected in academia, has been described as the main change in economics since around 1900. Economists debate the path they believe their profession should take, surveys among economists indicate a preference for a shift toward the latter. Most major universities have a faculty, school or department. However, many prominent economists come from a background in mathematics, political science, sociology, getting a PhD in economics takes six years, on average, with a median of 5.3 years. The Nobel Memorial Prize in Economics, established by Sveriges Riksbank in 1968, is a prize awarded to each year for outstanding intellectual contributions in the field of economics.
The prize winners are announced in October every year and they receive their awards on December 10, the anniversary of Alfred Nobels death. In contrast to regulated professions such as engineering, law or medicine, in academia, to be called an economist requires a Ph. D. degree in Economics. A professional working inside of one of many fields of economics or having a degree in this subject is often considered to be an economist. In addition to government and academia, economists are employed in banking, accountancy, marketing, business administration, lobbying. Politicians often consult economists before enacting economic policy, many statesmen have academic degrees in economics. Economics graduates are employable in varying degrees depending on the regional economic scenario, small numbers go on to undertake postgraduate studies, either in economics, teacher training or further qualifications in specialist areas. Nearly 135 colleges and universities grant around 900 new Ph. D. s every year, incomes are highest for those in the private sector, followed by the federal government, with academia paying the lowest incomes.
As of January 2013, PayScale. com showed Ph. D. economists salary ranges as follows, all Ph. D. economists, $61,000 to $160,000, Ph. D. The largest single grouping of economists in the UK are the more than 1000 members of the Government Economic Service. This figure compares very favourably with the picture, with 64 percent of economics graduates in employment. Some current well-known economists include, Ben Bernanke, Chairman of the Federal Reserve from 2006 to 2014, milton Friedman, Nobel Memorial Prize in Economic Sciences laureate in Economics
Frank Horace Hahn FBA was a British economist whose work focused on general equilibrium theory, monetary theory, Keynesian economics and monetarism. A famous problem of economic theory, the conditions under which money can have a value in a general equilibrium, is called Hahns problem after him. Frank Hahn was born on 26 April 1925 in Berlin to Czech parents and his father was a chemist by profession and a writer. The family moved to Prague in 1931 and left for England in 1938 and he and his brother were educated at Bournemouth School from when he was 13, a school for which he retained an abiding enthusiasm. He married Dorothy Salter, an economist, in 1946, as a student, he had been part of the Hayek–Robbins seminar at LSE, and he once said his wife had been an original member of the Mont Pelerin Society. Hahn began his career in 1948 at the University of Birmingham. In 1960 he joined the University of Cambridge - as a Fellow of Churchill College, in 1967 he moved to the London School of Economics, where he received his first professorship.
He returned to Cambridge as Professor of Economics five years and his inaugural lecture On the notion of equilibrium in economics was delivered on 28 February 1973. From 1990 to 1996 Hahn directed the PhD program of the Economics Department at the University of Siena and he eventually became Emeritus Professor at Cambridge. Frank Hahn, by his own admission, was influenced in economics by John Hicks, W. M. Gorman, Takashi Negishi and he in turn influenced a large number of colleagues and students. He died in Cambridge on 29 January 2013, following a short illness and he is survived by his wife Dorothy, née Salter, whom he had married in 1946. The Share of Wages in the Trade Cycle, Economic Journal, the Share of Wages in National Income, Oxford Economic Papers vol.3 No.2. The Rate of Interest in General Equilibrium Analysis, Economic Journal, gross Substitutes and the Dynamic Stability of General Equilibrium, Econometrica vol 26 pp. 169–70. The Patinkin Controversy, Review of Economic Studies vol, the Stability of Growth Equilibrium, Quarterly Journal of Economics vol.
Money, Dynamic Stability and Growth, Metroeconomica vol.13 No.11, a Stable Adjustment Process for a Competitive Economy, Review of Economic Studies vol 39 pp. 62–5. A Theorem on Non-Tatonnement Stability with T. Negishi, Econometrica vol.30 No.3, on the Stability of a Pure Exchange Equilibrium, International Economic Review, vol. The Stability of the Cournot Oligopoly Solution, Review of Economic Studies vol.29 pp. 329–33. On the Disequilibrium Behavior of a Multi-Sectoral Growth Model, Economic Journal The Theory of Economic Growth, A survey, with R. C. O. Matthews, Economic Journal vol 74 pp. 779–902
Huw David Dixon, born 1958, is a British economist. Dixon was a fellow of the CEPR from 1991–2001, a member of the Royal Economic Society council, and he has been on the Editorial Board of the Review of Economic Studies, the Journal of Industrial Economics. He edited the Controversies section of the Economic Journal and has been the Chair of the Royal Economic Society Conference 1992, Dixon has a wide scope in terms of the areas of economics he has researched and published in and he has been described as one of Europes leading economists. The topics include, Bertrand–Edgeworth models with strictly convex costs, francis Edgeworth developed the analysis of the model of Bertrand competition in a setting where firms had constant marginal cost up to capacity. Dixon explored how this could be generalized to the case of convex costs and he established the existence of a mixed-strategy Nash equilibrium, and of an Epsilon-equilibrium in a large market, and in other aspects. The use of capital to alter the way firms compete in oligopoly by altering their marginal cost, Dixon explored the implications of evolutionary ideas for oligopoly theory and learning.
He developed one of the first models of endogenous aspirations in economics and this is an idea that was much explored in many other papers by him and more recently. This paper was the first to demonstrate in a general equilibrium model that the fiscal multiplier could be increasing with the degree of imperfect competition in the output market. The reason for this is that competition in the output market tends to reduce the real wage. When government spending is increased, the increase in lump-sum taxation causes both leisure and consumption decrease. The greater the degree of competition in the output market. Hence the fiscal multiplier is less one, but increasing in the degree of imperfect competition in the output market. Other topics include imperfect competition in macroeconomics, nominal rigidity, most of his work is New Keynesian. Dixon supports the High Speed 2 development for the United Kingdom and he has contributed to The Times Higher Education Supplement multiple times regarding economics.
He has authored a book Surfing Economics, which explores New Keynesian economics, the Natural Rate, Bounded Rationality, Social Learning, cardiff Business School, Huw Dixon Official website huwdixon. org
Thomas Robert Malthus
Thomas Robert Malthus FRS was an English cleric and scholar, influential in the fields of political economy and demography. Malthus himself used only his name, Robert. Populations had a tendency to grow until the class suffered hardship and want and greater susceptibility to famine and disease. Malthus wrote in opposition to the view in 18th-century Europe that saw society as improving. As an Anglican cleric, Malthus saw this situation as divinely imposed to teach virtuous behaviour, Malthus criticized the Poor Laws for leading to inflation rather than improving the well-being of the poor. He supported taxes on imports, because food security was more important than maximizing wealth. His views became influential, and controversial, across economic, social, pioneers of evolutionary biology read him, notably Charles Darwin and Alfred Russel Wallace. The seventh child of Henrietta Catherine and Daniel Malthus, Robert Malthus grew up in The Rookery, petersen describes Daniel Malthus as a gentleman of good family and independent means.
A friend of David Hume and Jean-Jacques Rousseau, the young Malthus received his education at home in Bramcote, and at the Warrington Academy from 1782. Warrington was an academy, at the end of its existence. Malthus entered Jesus College, Cambridge in 1784, there he took prizes in English declamation and Greek, and graduated with honours, Ninth Wrangler in mathematics. He took the MA degree in 1791, and was elected a Fellow of Jesus College two years later, in 1789, he took orders in the Church of England, and became a curate at Oakwood Chapel in the parish of Wotton, Surrey. Malthus came to prominence for his 1798 essay on population growth, in it, he argued that population multiplies geometrically and food arithmetically, whenever the food supply increases, population will rapidly grow to eliminate the abundance. He wrote the text in reaction to the optimism of his father. Malthus constructed his case as a response to writings of William Godwin. The Essay gave rise to the Malthusian controversy during the next decades, the content saw an emphasis on the birth rate and marriage rates.
The neo-Malthusian controversy, or related debates of many later, has seen a similar central role assigned to the numbers of children born. In 1799 Malthus made a European tour with William Otter, a college friend, travelling part of the way with Edward Daniel Clarke and John Marten Cripps, visiting Germany
In macroeconomics, a multiplier is a factor of proportionality that measures how much an endogenous variable changes in response to a change in some exogenous variable. For example, suppose variable x changes by 1 unit, which causes another variable y to change by M units, two multipliers are commonly discussed in introductory macroeconomics. In monetary microeconomics and banking, the money multiplier measures how much the money supply increases in response to a change in the monetary base, the multiplier may vary across countries, and will vary depending on what measures of money are considered. For example, consider M2 as a measure of the U. S. money supply, if a $1 increase in M0 by the Federal Reserve causes M2 to increase by $10, the money multiplier is 10. Multipliers can be calculated to analyze the effects of policy, or other exogenous changes in spending. For example, if an increase in German government spending by €100, with no change in tax rates, causes German GDP to increase by €150, other types of fiscal multipliers can be calculated, like multipliers that describe the effects of changing taxes.
Keynesian economists often calculate multipliers that measure the effect on demand only. American Economist Paul Samuelson credited Alvin Hansen for the inspiration behind his seminal 1939 contribution, here, t is the tax rate and m is the ratio of imports to GDP. It is assumed that b >0, the general method for calculating short-run multipliers is called comparative statics. That is, comparative statics calculates how much one or more endogenous variables change in the short run, the comparative statics method is an application of the implicit function theorem. Dynamic multipliers can be calculated and that is, one can ask how a change in some exogenous variable in year t affects endogenous variables in year t, in year t+1, in year t+2, and so forth. A graph showing the impact on some variable, over time, is called an impulse-response function. The general method for calculating impulse response functions is called comparative dynamics. In the tableau économique, one sees variables in one period feeding into variables in the period, and a constant rate of flow yields geometric series.
Complex multiplier Local multiplier effect Multiplier uncertainty Social Multiplier Effect
The Great Depression was a severe worldwide economic depression that took place during the 1930s. The timing of the Great Depression varied across nations, in most countries it started in 1929 and it was the longest and most widespread depression of the 20th century. In the 21st century, the Great Depression is commonly used as an example of how far the economy can decline. The depression originated in the United States, after a fall in stock prices that began around September 4,1929. Between 1929 and 1932, worldwide GDP fell by an estimated 15%, by comparison, worldwide GDP fell by less than 1% from 2008 to 2009 during the Great Recession. Some economies started to recover by the mid-1930s, however, in many countries, the negative effects of the Great Depression lasted until the beginning of World War II. The Great Depression had devastating effects in both rich and poor. Personal income, tax revenue and prices dropped, while international trade plunged by more than 50%, unemployment in the U. S. rose to 25% and in some countries rose as high as 33%.
Cities all around the world were hit hard, especially dependent on heavy industry. Construction was virtually halted in many countries, farming communities and rural areas suffered as crop prices fell by about 60%. Facing plummeting demand with few sources of jobs, areas dependent on primary sector industries such as mining and logging suffered the most. Even after the Wall Street Crash of 1929 optimism persisted for some time, john D. Rockefeller said These are days when many are discouraged. In the 93 years of my life, depressions have come, prosperity has always returned and will again. The stock market turned upward in early 1930, returning to early 1929 levels by April and this was still almost 30% below the peak of September 1929. Together and business spent more in the first half of 1930 than in the period of the previous year. On the other hand, many of whom had suffered losses in the stock market the previous year. In addition, beginning in the mid-1930s, a severe drought ravaged the agricultural heartland of the U. S, by mid-1930, interest rates had dropped to low levels, but expected deflation and the continuing reluctance of people to borrow meant that consumer spending and investment were depressed.
By May 1930, automobile sales had declined to below the levels of 1928, prices in general began to decline, although wages held steady in 1930
John Maynard Keynes
John Maynard Keynes, 1st Baron Keynes CB FBA, was a British economist whose ideas fundamentally changed the theory and practice of macroeconomics and the economic policies of governments. His ideas are the basis for the school of thought known as Keynesian economics and he instead argued that aggregate demand determined the overall level of economic activity and that inadequate aggregate demand could lead to prolonged periods of high unemployment. According to Keynesian economics, state intervention was necessary to moderate boom, Keynes advocated the use of fiscal and monetary policies to mitigate the adverse effects of economic recessions and depressions. He and other economists had disputed the ability of government to regulate the business cycle favorably with fiscal policy. When Time magazine included Keynes among its Most Important People of the Century in 1999, the Economist has described Keynes as Britains most famous 20th-century economist. In addition to being an economist, Keynes was a servant, a director of the Bank of England.
John Maynard Keynes was born in Cambridge, Cambridgeshire and his father, John Neville Keynes, was an economist and a lecturer in moral sciences at the University of Cambridge and his mother Florence Ada Keynes a local social reformer. Keynes was the first born, and was followed by two more children – Margaret Neville Keynes in 1885 and Geoffrey Keynes in 1887, Geoffrey became a surgeon and Margaret married the Nobel Prize-winning physiologist Archibald Hill. According to the economist and biographer Robert Skidelsky, Keyness parents were loving and they remained in the same house throughout their lives, where the children were always welcome to return. Keyness mother made her childrens interests her own, and according to Skidelsky, because she could grow up with her children, they never outgrew home. In January 1889, at the age of five and a half and he quickly showed a talent for arithmetic, but his health was poor leading to several long absences. He was tutored at home by a governess, Beatrice Mackintosh, in January 1892, at eight and a half, he started as a day pupil at St Faiths preparatory school.
By 1894, Keynes was top of his class and excelling at mathematics, in 1896, St Faiths headmaster, Ralph Goodchild, wrote that Keynes was head and shoulders above all the other boys in the school and was confident that Keynes could get a scholarship to Eton. In 1897, Keynes won a scholarship to Eton College, where he displayed talent in a range of subjects, particularly mathematics, classics. At Eton, Keynes experienced the first love of his life in Dan Macmillan, despite his middle-class background, Keynes mixed easily with upper-class pupils. In 1902 Keynes left Eton for Kings College, after receiving a scholarship for this to read mathematics, Alfred Marshall begged Keynes to become an economist, although Keyness own inclinations drew him towards philosophy – especially the ethical system of G. E. Moore. Keynes joined the Pitt Club and was an member of the semi-secretive Cambridge Apostles society. Like many members, Keynes retained a bond to the club after graduating, before leaving Cambridge, Keynes became the President of the Cambridge Union Society and Cambridge University Liberal Club
Induced demand, or latent demand, is the phenomenon that after supply increases, more of a good is consumed. This phenomenon, called induced traffic, is a factor to urban sprawl. The inverse effect, or reduced demand, is true Latent demand has been recognised by road traffic professionals for many decades, and was initially referred to as traffic generation. In the simplest terms, latent demand is demand that exists, once additional capacity is added to the network, the demand that had been latent materializes as actual usage. In New York, it was seen in the highway-building program of Robert Moses. Similarly, the building of the Brooklyn-Battery Tunnel failed to ease congestion on the Queens-Midtown Tunnel, J. J. Leeming, a British road-traffic engineer and county surveyor between 1924 and 1964, described the phenomenon in his 1969 book, Road Accidents, Prevent or Punish. Leeming went on to give an example of the effect following the opening of the Doncaster Bypass section of the A1 in 1961.
By 1998, Donald Chen quoted the British Transport Minister as saying The fact of the matter is that we cannot tackle our traffic problem by building more roads. An aphorism among some traffic engineers is Trying to cure traffic congestion by adding more capacity is like trying to cure obesity by loosening your belt. According to city planner Jeff Speck, the text on induced demand is the 1993 book The Elephant in the Bedroom, Automobile Dependence and Denial, written by Stanley I. Hart. In fact, this is one of the key justifications for construction of new road capacity, a change in the cost of travel results in a change in the quantity consumed. This can be explained using the supply and demand theory. For roads or highways, the supply relates to capacity and the quantity consumed refers to vehicle-kilometres travelled, the size of the increase in quantity consumed depends on the elasticity of demand. A review of research suggests that the elasticity of traffic demand with respect to travel time is around −0.5 in the short-term.
This indicates that a 1. 0% saving in time will generate an additional 0. 5% increase in traffic within the first year. In the longer-term, a 1. 0% saving in time will result in a 1. 0% increase in traffic volume. In the short term, increased travel on new road space can come from one of two sources, diverted travel and induced traffic, diverted travel occurs when people divert their trip from another road or retime their travel. Induced traffic occurs when new automobile trips are generated and this can occur when people choose to travel by car instead of public transport, or decide to travel when they otherwise would not have