Financial Economics, Mathematical Economics, Microeconomics
Compound Interest: Simple vs Compound vs Continuous CompoundingEinstein almost certainly never called compound interest the eighth wonder of the world. The mathematics is remarkable enough without the endorsement — and once you see why the number e turns up uninvited,...
Consumer Choice, Mathematical Economics, Microeconomics
Introduction: Economics as Constrained Optimisation Nearly every proposition in microeconomics is the solution to the same mathematical problem. A consumer maximises utility subject to a budget. A firm minimises cost subject to an output requirement. A planner...
Development Economics, Economic Growth, Macroeconomics
Introduction: The Question That Dwarfs All Others Robert Lucas wrote that once one begins to think about long-run growth, it is hard to think about anything else. The reason is arithmetic. A country growing at 1% per year doubles its income in seventy years. A country...
Central Banking, Macroeconomics, Monetary Economics
Introduction: What Central Banks Do When They Run Out of Room The standard tool of monetary policy is the short-term interest rate. When the economy is weak, cut it. When inflation threatens, raise it. In late 2008 this tool broke. Policy rates in the United States,...
Econometrics, Regression Analysis, Statistics
Introduction: The Workhorse of Empirical Economics Almost every empirical claim you have ever read in economics — that education raises earnings, that minimum wages do or do not cost jobs, that carbon taxes reduce emissions — rests on a regression. Usually an ordinary...
Behavioural Economics, Financial Economics
Introduction: The Most Useful Wrong Idea in Finance In 2013, the Nobel Prize in Economic Sciences was shared by Eugene Fama and Robert Shiller. Fama had spent his career arguing that asset prices efficiently incorporate all available information. Shiller had spent his...
Health Economics, Microeconomics
Introduction: The Market That Cannot Work Like a Market In 1963, Kenneth Arrow published a paper in the American Economic Review titled “Uncertainty and the Welfare Economics of Medical Care.” It is widely regarded as the founding document of health...
Environmental Economics, Microeconomics, Public Economics
Introduction: The Externality That Ate the Planet Climate change is, in the standard economic framing, the largest market failure in human history. Every tonne of carbon dioxide released imposes a cost on people who did not consent to it, were not compensated for it,...
Labour Economics, Microeconomics
Labour Economics · Core Debate The minimum wage debate is not about whether demand curves slope downward. They do. It is about the shape of the labour supply curve facing an individual firm — and thirty years of natural-experiment evidence has changed what economists...
