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> Where did the economies get a boost when women joined the labor force? In Germany the post-war economic miracle happened mostly without them. I have a "hobby
by wslh 2y ago
> Where did the economies get a boost when women joined the labor force? In Germany the post-war economic miracle happened mostly without them.
I have a "hobbyist conjecture" that I'd love feedback on from people familiar with economics. Simply put, the idea is this: if you were to give every human around the world a million dollars (imagine this is easy and feasible), prices would inevitably rise. The poorest might experience some improvement in their standard of living, but not as much as one might expect. This effect seems to go beyond inflation alone. My intuition is that prices ultimately adjust based on social structures and expectations.
Similarly, we see a unique economic advantage in many dual-income gay couples who, statistically, achieve higher standards of living. Often, this is partly because fewer have children, which shifts financial priorities and spending capacities.
- program_whiz 2y agoYes this is common knowledge in econ supply/demand and money supply. Other currencies 1M base notes is not a lot (e.g. 1M dinar). You can just add/remove zeros but prices have adjusted, those people can't live like "millionaires" with 1M dinar. There was a time goods like meat cost pennies, now it's $10 per pound. In those times $10,000 would be a life-altering amount of money, today most people have $10,000 in assets. The price of goods is related to money supply, they get more expensive if people have more money. Money has no intrinsic value, it is balanced by whatever goods and services can be bought by it. If you add money but no goods and services, money is worth less (see COVID policy, increase money and decrease goods and services).
- wslh 2y agoThank you! The COVID policy example feels especially relevant because it illustrates the kind of sudden economic shift I'm curious about, rather than just changes in nominal currency values. To clarify my thought experiment: imagine a stable economy where suddenly every person worldwide is gifted $1 million USD. I'm interested in exploring how this kind of immediate influx would impact prices and standards of living, beyond just inflation.
- staunton 2y agoIf every person is giftet USD1M, prices of all things will go up by a lot. Furthermore, prices of necessities will rise by larger fractions because most people in the world are significantly poorer than the median of this forum. More generally, gifting every person worldwide the same amount of money seems roughly equivalent to taxing every above-average wealth person a fixed percentage of their surplus and giving every below-average-wealth person a fixed percentage of their deficit...
- cousin_it 2y agoI think that's not quite true, because rich people mostly keep their wealth in assets, not cash. Stock will just rise.
- staunton 2y agoWhich of my two claims is not true? Why should stock rise more than basic necessities? Of course, all prices would rise a lot. But I think stocks would rise by a smaller factor.
- cousin_it 2y agoAh sorry, I wasn't very clear. I was talking about your second claim - that giving people lots of money would redistribute a fixed proportion of wealth from the rich to the poor. My point was that the rich have most of their wealth in stocks and the like, so the redistribution would only affect the cash portion of their wealth, which is quite small.
- staunton 2y agoI see. The "taxation" scheme I had in mind was intended to apply to "any and all wealth", which I didn't make clear. Do you think it works out then? On a more realistic note, gifting every human 1M would probably completely break the financial system and cause a global recession...
- TeMPOraL 2y agoIANAEconomist, but I've long arrived at the same conjecture; I usually phrase it as "the market always adjusts to keep average discretionary income at 0". So, if you give everyone in a given population (I'd go for the country instead of the world to see the effect much faster) a million dollars a month, the average discretionary income would, obviously, rise by one million dollars. That would cause prices to raise, but also all kinds of new products and services to become available. Some of those would evolve from luxuries to necessities over time - like e.g. having a car, or a mobile phone. Housing would likely eat a chunk of the surplus. In the end, it would all stabilize, at exactly the "life is more expensive by a million dollars, on average" point. We'd still have socioeconomic classes - poor with < 0 surplus, rich with > 0 surplus, and the middle with ~0 surplus. Some people would've moved to different places on the ladder, but the ladder would still be there, simply because of variability in individual incomes. I guess put another way, you could say, the market is a DC filter - as wealth distribution in a population changes, the market always adjusts to cancel out the constant component ("DC offset").
- conception 2y agoExcept via policy you can adjust how much each percentile has. If you set a tax at 70% over a million dollars of income/capital gains/etc, and bolster lower brackets to have more income kept (eg fewer sales taxes), you can increase the amount of discretionary incomes for people where a little bit more goes a long way. It’s not like there aren’t controls available for wealth distribution.
- wslh 2y agoIt's not that easy since changing policies could give you the exact opposite result that politicians think. For example, increasing wealth taxes could make people to go elsewhere and moving fortunes abroad. Changing policies frequently increase the risk for future arbitrary decisions.
- skobes 2y agoYou're right of course, except I wouldn't say it's "beyond inflation alone" - it IS inflation by definition. It's beyond the usual level of inflation, but that doesn't make it a separate phenomenon, you've just caused a shit ton of inflation to happen by giving everyone a million dollars.