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Can anyone summarize these six big economic ideas?
by rer 10y ago
Can anyone summarize these six big economic ideas?
- deleted 10y ago[deleted]
- 1wd 10y ago1. Akerlof’s information asymmetry: Sellers must use signalling to inform buyers of their product's high quality. 2. Minsky's financial instability hypothesis: Stability makes even high risk debt attractive which leads to a crisis of instability, a "Minsky moment". 3. Stolper-Samuelson theorem: Abolishing tariffs in favor of free trade with low-wage nations can hurt workers in high-wage nations, even when the high-wage nation benefits overall. 4. Keynes' fiscal stimulus and multipliers: Every government dollar spent stimulates the economy multiple times, by subsequently being spent by the recipients. 5. Nash equilibrium, game theory and the prisoner dilemma: Rational actors make choices based on what they think other actors will do. This leads to stable but sometimes sub-optimal scenarios. 6. Mundell-Fleming trilemma: Pick two: Fixed exchange rate, monetary autonomy or free flow of capital. You can't have all three.