Economics Question: Does Poverty Force People to Spend More?

Is being poor self-reinforcing because it forces one to spend more on stuff a little bit at a time over time, as opposed to saving up and/or forking over a large sum at once, and eventually spending less?

I don’t consider myself “poor,” but I do have a personal situation that illustrates the question:

. . . → Read More: Economics Question: Does Poverty Force People to Spend More?

When and where do great feats of architecture come about?

Why do some places achieve great feats of architecture, while others routinely opt for merely functional structures? The economist in me is instinctively unsatisfied at a claim that America lacks great architecture because they have poor taste. Taste-based explanations are a cop-out. Instead, how about the following five angles:

Surplus To go beyond merely . . . → Read More: When and Where Do Great Feats of Architecture Come About?

Deflation

I’ve written about deflation twice before: Deflation and Deflation 2. Third time’s the charm?

The common wisdom is that deflation of the currency is bad. When money deflates, it becomes more valuable, even when you do nothing. So the theory is that people won’t spend their money, because it will become ever-more valuable.

That . . . → Read More: Deflation

Recession: Keynesian or Hayekian

In the Times of India I hear is all about “infotainment”, with more information less entertainment in economic times. So as far ET columnists go hardly can one hold them the standards of an academic debate, loose ends are quite natural. But what about sheer inconsistency, or gross error?

Swami ET article today is . . . → Read More: Recession: Keynesian or Hayekian

American Recovery and Reinvestment Act?

The American Recovery and Reinvestment Act, commonly known as “the Obama stimulus plan” or “bailout plan” got signed into law recently, after weeks of haggling in the House. The stimulus plan has a total price tag of $787 billion, and represents 5.5% of gross domestic product (GDP), although its impact on the economy may be [...] . . . → Read More: American Recovery and Reinvestment Act?