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This question exposes the flaws of quantitative economic analysis. How can you price future assets in todays dollars with unstable economic growth? inflation
by nazgulnarsil 17y ago
This question exposes the flaws of quantitative economic analysis. How can you price future assets in todays dollars with unstable economic growth? inflation could be 3% a year or 30% a year depending on what the government does.
- Dilpil 17y agoHow is inflation relevant to this calculation? Both career paths will presumably be paid with the same currency.
- stcredzero 17y agoDepends on the country, the industry, and what happens to the industry in the future.
- tokenadult 17y agoHow can you price future assets in todays dollars with unstable economic growth? The same discount rate applies in general to both income streams in the usual calculation. It is enough to figure out how different the income streams are likely to be (very different, according to some of the links already submitted as replies here) and then get a ballpark estimate of the present value of that difference. By hypothesis, most parents substantially underinvest in ensuring their children's college readiness and math ability.
- nazgulnarsil 17y agoyou're assuming homogenous growth rates between economic sectors. the labor market is determined by supply and demand. who knows what the proportion of CS grads:CS jobs there will be in 25 years for instance.