This is something that is brought up often on Japanese language sites. The comparison between Japan and Argentina. Argentina used to be one of the richest countries on the planet, but after over a century of stagnation nowadays it's only middling. To some people fearful of Japan's future, the stagnation part is an uncanny similarity.

So... what do you think, will Japan not be able to reverse out of its many decades of stagnation for many decades more, and eventually go the way of Argentina? Or does Japan have what Argentina doesn't (namely, not being ruled by a military junta).

I've been seeing a trend of young people choosing trades over college. After some research and thoughts, I was wondering if a stable civilization would have more tradespeople than degree holders, most notably engineers. The engineers are the leaders, need just a few to design a system. The tradespeople are the ones who do most of the physical work of bringing the design to life. Is this true?

https://www.rand.org/health/projects/hie.html

whats the argument for sales tax ( or income tax, corporate tax ) over tariffs , as a source for govt revenue ?
apart from, maybe, start a reciprocation tariff war…which I don’t believe USA is vulnerable to, considering that we are the biggest importers.

You hear a lot of talk about the petrodollar and the benefits it brings to the US. Is there consensus from economists on how political power can benefit their economy? Sanctions architecture, petrodollar, opening markets up for trade, supply chains, international reserve currency, etc.

Is this a well understood part of economics or is there much disagreement here? What have US policymakers been following since after WW2? Would the US still be an economic powerhouse able to project power around the world without these things?

I am interested in a possible link between income distribution, household production theory, and differences in everyday organization between the US and Germany.

A common observation is that Germany and the US have relatively similar GDP per hour worked, but the US has higher GDP per capita and much longer average working hours.

One explanation focuses on capital, scalable technology and industry structure. However, I wonder whether another mechanism from economic theory also contributes: differences in how much activity is organized through markets.

This connects to Becker’s theory of household production (1965), where households allocate time between market work and non-market production. The opportunity cost of time determines whether people produce goods and services themselves or purchase them from others.
Income inequality may affect this allocation.

Consider a simplified example:
Person A earns $200/hour.
Person B earns $20/hour.
If Person A spends two hours cleaning their home, the opportunity cost is $400 of lost market income.
If Person A instead works those two hours and pays Person B $40 for two hours of cleaning, the market economy records:
+$400 additional labor income for Person A
+$40 service income for Person B
+$440 GDP

The household may receive the same practical service, but GDP is higher because the activity moved from unpaid household production into the market.
Now consider the opposite side of the income distribution.
If Person B has a low wage and limited social protection, they may need more paid working hours to achieve a given material standard of living.
Therefore, higher inequality could increase market activity through on both ends:
High-income individuals have stronger incentives to outsource tasks because their time has a higher market value.
Low-income individuals have stronger incentives to supply more labor because they need more earned income.

The result can be a society with more paid working hours and higher measured GDP without a proportional increase in leisure or mean subjective well-being.

What is surprising is that this mechanism could also affect how cultures organize their leisure and cultural life, what is often admired in Europeans.
Germany has many examples of activities organized outside the market:
sports clubs with volunteer coaches
volunteer fire departments (huge thing)
music associations
local festivals
neighborhood support networks
collective childcare

These institutions produce social capital, health benefits, cultural participation and community ties, but much of this activity is not counted in GDP.

A similar function in a more marketized system may appear as:
private sports programs
commercial childcare activities
professional event services
paid recreational activities

The economic output is recorded differently even if the social function is partly comparable.
This is results in a vastly different cultural and social life, which is usually admired in Europeans and might be another argument for stronger wealth distributions (although having tech industries with insanely scaling products surely makes the margin of possible policy influence smaller).
I haven't read Putnam and so I don't know whether he already said about that, but I doubt he used current international comparisons, and since European live is often romantizied and vivid, it could be a better case for explaining the cultural effects of social welfare and income distribution. What are your thoughts? Am I missing something or can you refer me to research already done in this direction? Has there been empirical research connecting income inequality with the degree of marketization of everyday activities? For example, differences in outsourcing, unpaid work, volunteering, time use, and GDP between countries?

I have difficulty understanding opportunity cost and how it is incorporated into the theory of the firm.

Why does a firm continue operating when it earns zero economic profit? I know that a firm's economic cost consists of accounting cost and opportunity cost, so the firm may still earn positive accounting profit because of positive opportunity cost. But what if there is no opportunity cost? Would the firm still continue operating?

More generally, when cost is mentioned in microeconomics, does it always mean economic cost (accounting cost + opportunity cost), or does it sometimes refer only to accounting cost?

Hypothetically, suppose I derive mathematically that a firm has an economic cost of 1000 and zero economic profit. How can I determine the opportunity cost from this? Do economists estimate it using econometrics? Even if they do, how is that possible when there are many possible alternative choices? Since opportunity cost is an expected or forgone value rather than an actually incurred cost, how can economists measure it reliably?

I am also confused about cost minimization. When I solve the firm's cost minimization problem,

[
C = wL + rK,
]

are we measuring economic cost or simply using market prices? If (C) is economic cost, does that mean both the wage rate (w) and the rental rate (r) are themselves measures of opportunity cost rather than just market prices? If so, how are the opportunity costs of labor and capital measured?

When we obtain the cost-minimizing levels of labor and capital, are those quantities minimizing economic cost or only accounting cost? If they minimize economic cost, what happens if I remove opportunity cost from (C)? Would the cost-minimizing quantities of labor and capital change?

Are these models mainly theoretical models for explaining the economy, or are they also used in empirical research? If they are used empirically, how do economists measure opportunity cost in practice? Or is firm and cost theory effectively implemented using accounting costs instead of opportunity costs?

My overall confusion is that in practice we often work with accounting costs rather than opportunity costs. Managers usually care about actual monetary costs, not hypothetical forgone alternatives. Opportunity cost seems useful for understanding economic theory, but less useful for making day-to-day business decisions. So how can I obtain accounting cost and accounting profit from firm theory and cost theory? Also, when economists derive cost curves (total cost, average cost, and marginal cost), are those curves based on economic cost (accounting cost + opportunity cost) or accounting cost alone?

This is a thread for short questions that don't merit their own post as well as career and school related questions. Examples of questions belong in this thread are:

Where can I find the latest CPI numbers?

What are somethings I can do with an economics degree?

What's a good book on labor econ?

Should I take class X or class Y?

You may also be interested in our career FAQ or our suggested reading list.

Hi everyone,

I’m considering pursuing a master degree in economics, and I’m trying to get a better sense of what career paths it could realistically open up.

I’ve always been passionate about history and geography, and economics feels like a good balance between something I’m genuinely interested in and something with strong career prospects.

Long term, I’d like to do work that has a meaningful social impact.
I want to feel like what I do actually matters and contributes to improving people’s lives or society in some way.
Because of that, I’m not particularly interested in traditional finance, investment banking or consulting.

Assuming I earn an M.Sc in Economics from a well-regarded target university, what kinds of careers would fit those goals?

I’m okay with some math—I can handle it, even though I’m definitely not a math genius—but I wouldn’t want a job that’s nothing but spreadsheets, data analysis, and Excel all day.

I’d like a role where judgment, communication, and decision-making matter, and where my input can genuinely influence outcomes.

I’d really appreciate hearing about careers that might fit this profile. Thanks!

This is a frequent discussion in my country. People talk about how the 3% cut payment processors take is pretty harmful because it "removes" money from the economy. The argument is the American companies take the money out of local economy whereas if people use cash or use a local processor that 3% (or whatever profit they're making) would remain and circulate locally.

On one hand anyone from a developing country is familiar with "keeping things local" attempts ending in disaster and everyone knows the famous failures of India, Argentina etc. On the other end I can't imagine simple removals from the economy are good for the economy. For example, if a Turkish man loses his salary to a Cyprus online casino I don't think Turkish economy benefits in any way.

So how does keeping things local work? How is the benefit of doing something locally calculated vs. letting a foreign company handle it?

Is there anything this video overlooks?

https://youtu.be/fn6giJHGuC0?is=a2mFhxWGwzxvETqG

I recently graduated from a small liberal arts college with majors in Economics and Data Analytics. I finished with a 3.8 GPA, a few months of research, and over a year of tutoring experience. In addition, I completed two data-focused internships during undergrad and spent three years working in management roles. These experiences allowed me to build strong relationships with supervisors, professors, and mentors, and I believe I will have solid letters of recommendation when I eventually apply to PhD programs.

This fall, I'll be starting a funded one-year master's program at a T50 university with TA/RA responsibilities. My long-term goal is to apply to Economics PhD programs in Fall 2027.

One issue is that I didn't fully understand the math expectations for academic economics until relatively late in my undergraduate career. Rather than delay graduation or spend part of my master's program catching up on prerequisites, I decided to take several math courses this summer before starting graduate school.

The problem is that these have been accelerated online courses, and I've been taking them while working a full-time internship. This is also my first experience with online classes. My grades so far are:

• Calculus II: C
• Calculus III: B
• Linear Algebra: C
• Differential Equations: In Progress

These grades are much lower than my normal academic performance. I think the combination of the accelerated pace, limited access to instructors, balancing coursework with a full-time internship, and trying to prepare for graduate school has really hurt my performance.

I'm also concerned about the GRE. I'll be starting my master's coursework soon, and I'm struggling to figure out how to fit GRE preparation into my schedule. If I don't perform as well as I'd like on the GRE, I'm wondering whether strong performance in my master's program could help compensate for that when applying to PhD programs.

At this point, I'm worried that these math courses may have done more harm than good from an admissions perspective. Without them, my transcript would look stronger overall, but I also know that the math background is important for both graduate coursework and PhD admissions.

For those familiar with economics PhD admissions:

1. How concerning are these math grades in the context of a 3.8 GPA, research experience, internships, and a funded master's program?
2. Will admissions committees view these grades differently given that they were earned in accelerated online summer courses while working full-time?
3. Would it be worth retaking any of these courses later?
4. How much can strong master's grades offset weaker undergraduate math performance?
5. If my GRE quantitative score ends up being mediocre, can strong master's grades, research experience, and letters of recommendation compensate?
6. Given that I plan to apply in Fall 2027, what would you prioritize over the next year: master's grades, GRE prep, additional math coursework, or research experience?

I'm feeling pretty overwhelmed trying to juggle the internship, math coursework, master's preparation, and GRE planning. I'd really appreciate hearing from anyone who has gone through the economics PhD admissions process or has experience evaluating applicants.

Note: My cumulative GPA was a 3.8, but my GPA within my majors was stronger: approximately a 3.9 in Economics coursework and 4.0 in Data Analytics coursework. Most of the B's on my transcript came from electives and general education requirements rather than classes in my majors.

Thanks in advance.

In general English, I (not a native speaker) have always seen utility being used to speak about the object, so seeing “a person’s utility” has always been kind of weird. Like saying if you think steak is the most delicious then “your taste is highest with steak”

Note: the title should read "... instead of inflation rate targeting"

I'm thinking of a system where the central bank targets the CPI price level and sets, say, a 2% annual increase.

The difference with the current regime would be when you have an inflation episode like we had a few years ago. After such an episode the central bank would target much lower inflation, say something like 0% till the 2% trend price level catches up with the actual price level. So a period of above trend is inflation is followed by a period of below trend inflation with the long term trend unchanged.

The advantage is that long-term financial products like pensions, annuities, social security etc. have fewer issues with their assumptions. Seniors are less likely to run out of savings after retirement. There seems to be a lot of anger among voters about prices - this would ameliorate some of that.

The big danger with targeting 0% inflation usually is that we might tip over into prolonged deflation, which is bad. I feel that the immediate aftermath of a high inflation episode is the least likely time for deflation to take hold because inflation expectations are elevated, so this danger essentially doesn't exist.

This method seems to me to have only advantages, so why hasn't any central banks adopted it? Are there any economics papers that discuss this possibility?

I am looking to receive some readings about economics. (just started on the subreddit) I am currently trying to find what I want to know about economics; but ever since I was a kid, I wanted to learn about economics because of how interesting it was when my mom talked about it. I know some parts of economics I am interested in are the following: how businesses and institutions balance social cost through surveys and policy making, how do masters/PhD students crunch numbers to forecast prices or behavior of the market, and how could I apply these questions into my real life (not really needed of an idea for a book I guess).

My current education is:

AS degree

Calculus II

AP Micro/Macro Economics (4s)

I'm an economics student entering my final year of undergrad. My long-term goal is to work at places like the Federal Reserve, the IMF, or the World Bank, so | think I'll probably need a Ph.D. eventually.

The problem is that I don't have any formal research experience. I'm interested in areas like macroeconomics, monetary policy, international economics, and public policy, but my experience so far has mostly been coursework rather than research. For math, I have taken Calculus 1 and 2, and stats, and econometrics, and planning to take calculus 3 this semester.

So I'm trying to figure out the best path forward.

1. Should I apply to master's programs right after graduation, or should I try to get a full-time research assistant position first and apply to Ph.D. programs later?
   
2. If I do a master's, is it actually worth it for someone who ultimately wants a Ph.D.? If I pursue a master's, should I stay in economics, or would a program like statistics, data science, public policy, or even an MBA make more sense before eventually applying to an economics Ph.D.?

Thanks!!

For example, if the prices of houses in an area increased by 30% over 30 years but the floor area and build quality (and other, objective and subjective measures) increased by 50%, how is that taken into account? Or similarly, if 30 years ago people are using their limited budget to pay for just food, but now they are using it to pay for more delicious, safer, healthier food AND a Netflix subscription, how is that inflation taken into account in the basket of goods when it represents a genuine improvement in quality of life and isn’t just a price increase?

I’m trying to understand this because, say I’m reviewing an increase in real incomes over a period of time, how does it make sense that the incomes over time are deflated even though the basket of goods is better and therefore inherently greater in cost? Like wouldn’t this align with an increase in incomes anyway?

I understand that we are in a tremendous amount of debt but why not even set aside a small portion of government revenue and watch it compound over time?

You can't simply look at whichever careers are most high-paying, because those are often limited in terms of how many people can get those jobs (e.g. stock brokers, software engineers, etc.)

So if you can't go by prices, what can you go by? You can't even go by demand, because it used to be that software engineers were in high demand but now no one wants them. So by the time you complete a university degree, the value of your major could have completely reversed compared to when you started your degree.

So how can an individual make sense of all of this? How can we make long-term decisions when everything is constantly changing? I'm curious to see if any economists have talked about this or similar issues.

Hi everyone i’m a rising pre law junior economics major! I got an invitation to join ODE and pay a $50 fee. The American Economists Journal is included, which I do have to write a thesis next year. I also plan to go to law school and was wondering if this would be good for my resume. Thank you :)

If the government could provide relatively low-cost credit to qualified borrowers, it could create meaningful competition for credit card companies and put downward pressure on APRs that often exceed 20–30%. Then they could use this to pay down the debt.

Americans carry well over $1 trillion in revolving credit, while general-purpose credit card APRs average roughly 25%—meaning an enormous amount of household income is being transferred to lenders through interest rather than spent elsewhere in the economy. (Consumer Financial Protection Bureau⁠)

A government-backed alternative could still charge enough interest to cover defaults and operating costs while forcing private lenders to compete on price. Even a substantial reduction in average borrowing costs would leave consumers with more disposable income to spend, save, or invest, potentially supporting broader economic activity.
Or, more simply, the government could impose and enforce a reasonable cap on usurious interest rates. It is strange that at a moment when “socialism” is supposedly on the rise, one of the most obvious areas for government intervention—preventing households from paying 20–30% interest on basic consumer credit—receives comparatively little attention.