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The Economics Thread

harsh.ag

Hall of Fame Member
The infographic posted above tries to explain the phenomenon where median wage growth has been significantly lagging behind productivity growth. Ideally, you would have wage growth mirror the rise in productivity.

The three factors mentioned above are broken down here:

 

ohnoitsyou

International Regular
Economics; the pseudoscience of predicting with inflated confidence what happened last year.

EDIT: Wrong thread.
More like the pseudoscience of predicting with inflated confidence other peoples predictions made with inflated confidence.
 

ankitj

International Coach
I only understood/finished/started reading uppercut and dermos posts

i need to watch the crash course economics videos on youtube to refresh all that high school i slept through.
Once all the esoteric discussion on macroeconomics theory dies down, I will ask simpler questions. Like did Fed do the right thing by not raising rates and did RBI in India do the right but cutting them.
 
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harsh.ag

Hall of Fame Member
Once all the esoteric discussion on macroeconomics theory dies down, I will ask simpler questions. Like did Fed do the right thing by not raising rates and did RBI in India do the right but cutting them.
Well, that's really what the esoteric discussion was about tbf :happy:

Fed did the right thing. There isn't any upside to raising too early. That's because -

a) Inflation is 1.8% (for the month ended August). Still below Fed's target of 2%. Until you actually see inflation pushing past 2%, there is very little upside to raising rates.
b) Even though unemployment rates have come down to around 5.5%, which is very good news, the labor force participation rate hasn't shown a comparative uptick. Which means that people who were discouraged from looking for employment after the recession haven't yet come back.

I personally believe there is still a good time to go before they should raise. But I think they will raise sooner.

India's inflation rate (consumer price index), on average, has come down to 3.6%. The wholesale price index, although not the primary indicator, has been negative for a long time now, the latest being -4.9%. It points towards lower prices being passed on to consumers in the future (hopefully). Lowering rates is a perfectly good policy at this stage.
 
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Uppercut

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Marx probably counts too. Then there are economists with second-tier fame like Ricardo, Keynes, Friedman. It's not a great career if you want to be famous. And even if you are, the best you can hope for is that you're still alive to object when all of your ideas are horribly distorted for political ends.
 

harsh.ag

Hall of Fame Member
Furball's avatar change the best thing to happen to CW in a long time. Just above this thread.
 

indiaholic

International Captain
Question about the Minimum Wage: It seems to be a hot topic for the next election in the states. A lot of the discussion seems to be centred around the fact that the minimum wage has failed to track inflation. Is this true? Why wasn't the minimum wage linked to inflation in the first place? Was it meant to be a temporary measure?
 

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