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There are many different groups around the world who would love to see a steady state economy. This ambition is of particular importance to environmentalists who see it as a way to help protect the world from global warming. There are claims that such an economy would be ethically on a sounder footing and would create more happiness for citizens.
Diminishing returns is probably one of the most important concepts in Economic theory. It is so famous that it has now entered common everyday speech. Some people do get confused with diminishing returns but it is actually quite a simple idea.
An important idea in economic theory is economies of scale. If it wasn’t for the existence of this phenomena it is doubtful that the world economy would look anything like it does today. The reason large companies and multinationals exist is because they take advantage of economy of scale.
Anyone who saw the award winning film “A Beautiful Mind” will probably have heard of “game theory”. This film was based on the true story of John Nash and his battle with schizophrenia. This inspirational figure managed to overcome his mental health problems to go on to win a noble prize. The prize was awarded for his contribution to economics in the form of John Nash game theory; in particular his idea of the Nash’s equilibrium.
Those who listen to the financial news may have heard the term ‘Keynesian economics’ floated around. There may be some confusion as to what this is actually referring to. Discussions about the validity of this theory can become heated among economists so it is worth having some idea as to what is behind it all. A basic explanation will be provided here.
The concept of staggered contracting revolves around one primary topic: price. At a glance, staggered contracting seems like something only found in a parallel, Utopian dimension: prices don’t wildly fluctuate. In fact, under the definition of staggered contracting, prices don’t move at all in either direction.
In any economy, one thing is certain: the beginner investor is alive and well. In boom economies, this investor is filled with rampant enthusiasm and a desire to strike while the market is “hot” in order to get the maximum value possible. In recessionary economies, the beginner investor is still filled with rampant enthusiasm, albeit from a much different perspective. They are looking to come into the market while it’s down and make out like thieves in the night when it rises again. Perfect prediction is outside the capability of any human-created system, but the system of technical analysis allows us to come pretty close.
John Maynard Keynes called gold “the barbarous relic”. Now, long after Keynes’ school of economics became unfashionable, gold is once again in fashion, hitting an all time dollar record even when other metals and commodities have dived in price as a result of poor industrial demand. So what is driving the gold price?
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