Stack Exchange Network

Stack Exchange network consists of 175 Q&A communities including Stack Overflow, the largest, most trusted online community for developers to learn, share their knowledge, and build their careers.

Visit Stack Exchange

Questions tagged [economics]

To be used for general economics questions that are in some way related to personal finance, the subject of this site. Avoid asking questions that are speculative in nature, academic, or unrelated to personal finance.

0
votes
1answer
34 views

What are the dates that the yield curve inverted?

For the purpose of investing, I've been reading about the yield curve inversion and what it might mean about the economy. Unfortunately, all articles that I was able to find by searching on Google ...
1
vote
2answers
449 views

Could the US demonetize large bills? If so, how can I protect myself if I rely on holding US dollars in cash?

There was a demonetization in India. I heard that this was difficult for Indian residents to handle. I understand most of the money is in digital forms, but there is still a large amount of actual ...
72
votes
13answers
17k views

What (if any) is the reason to buy in small local stores?

Recently I have heard movements from the local stores (say clothes, electronics, foods, etc) and some politicians (of a particular wing) that argue that you should buy in local, small stores. ...
1
vote
1answer
164 views

On a statement of Harry Browne [closed]

I am reading a book on an investment strategy proposed by Harry Browne (1999, Fail-Safe Investing: Lifelong Financial Security in 30 minutes, pp. 39–40) known as the "permanent portfolio". He makes ...
30
votes
4answers
6k views

How exactly are exchange rates determined? [closed]

I was reading about how the exchange rates are fixed. I understand that demand and supply decide the exchange rate but how exactly is it done and by whom? For example, consider US and India. (https:/...
1
vote
1answer
61 views

Does the severity of a market downturn seem to be correlated with the length of the bull market that proceeded it? [closed]

There is a lot of talk on the net, in the WSJ, etc. about how we're in the longest bull market in recent memory, that "this can't last forever", and so on. Does history suggest that when things ...
0
votes
2answers
104 views

Why do public companies give guidance in quarterly reports? [closed]

Warren Buffet and James Dimon recently published an article in the WSJ saying public companies shouldn't give guidance in quarterly reports. From what I understand, they're saying that if a company ...
17
votes
3answers
731 views

How can I survive the economic crisis I see will hit Argentina soon?

I'm from Argentina, where the shit is about to hit the fan just like 2001. We are going to have a crisis similar to Greece in recent times (or us 17 years ago): all debt related. I'm not an economic ...
0
votes
1answer
91 views

Qatar is richest country but not largest economic country [closed]

What is the difference between world largest economic countries and richest countries?
7
votes
3answers
915 views

The proper term for a third party economy [closed]

A friend of mine asked me whether something odd was going on, including the following picture: Basically, the companies listed (Bitcoin, Uber, Facebook, Alibaba and Airbnb) sell a service in a market ...
1
vote
1answer
105 views

Do credit card balance transfer offers dry up during economic downturns? (USA)

I have great credit and occasionally take advantage of low-fee, 0% interest balance transfers offers on existing or new credit cards, always reading the fine print and paying it off without paying a ...
1
vote
2answers
97 views

How to pick from several products/services to maximize utility considering the cost of each option?

What is the proper way to consider the utility of a product/service versus its cost in order to make the best rational decision to get the "most for my dollar" if there are several choices for me to ...
63
votes
6answers
7k views

At what point do index funds become unreliable?

Passively investing in exchange-traded funds that track some broad index is often recommended for private investors that don't have the time or expertise for active investment. In particular, index ...
2
votes
3answers
398 views

S&P is consistently beating inflation?

I read this on a forbes article. From September 1967 to September 2007, the S&P 500 produced an annualized return of 7.14%, compared to the annualized gain of 4.67% in the CPI over the same ...
0
votes
1answer
131 views

How to get a grip on finance? [closed]

I hope this is not too off-topic (theoretical but not necessarily off-topic), but I am just starting to understand the financial world and I am a bit confused while reading publications and books ...
1
vote
1answer
201 views

Why is gold price falling in late 2016 given that it has historically rose when there are fears of inflation? [closed]

Since Trump got elected as president, gold price fall has accelerated. At the same time, fears of inflation heightened given expectation of Trump's fiscal stimulus. The dramatic fall in bond prices is ...
1
vote
5answers
13k views

Is the stock market a zero-sum game? [closed]

In the stock market, over both the short and long-term, does someone necessary need to lose in order for someone else to make a profit? If not, then more fundamentally does something — in the most ...
4
votes
2answers
136 views

What is the ratio of homes for sale vs homes occupied

I've been shopping for a home in Alberta and I've noticed a small town of approximately 240 homes, where about 12 of those are currently on the market. That's 5% of the homes currently up for sale. Is ...
3
votes
3answers
1k views

Do governments support their own bonds when their value goes down?

I'm far from expert in finance, so please bear with me. It's my understanding that a company who issued stock typically support it when the stock price go down. Does the same thing happen with ...
2
votes
1answer
56 views

Is there a financial benefit for buyers from using community currencies?

My city is introducing its own local currency, so I've been reading about similar established projects like the Brixton Pound. I understand that local businesses will benefit from it thanks to the ...
2
votes
1answer
126 views

How does trade generate profits for all parties? [closed]

Stupid question, i know, but I'm not financially literate enough and couldn't find proper keywords for Google search on my question. The question arises from the logic that all traders whether in ...
8
votes
4answers
1k views

How are the best way to make and save money at 22 years old

I am currently 22 years old, I work as an insurance biller and make about 800-900 dollars every two weeks cash. I have no expenses because I still live with my parents but I'm trying to branch out on ...
1
vote
1answer
84 views

How does the debt:GDP ratio affect the country's economy? [closed]

I was surpriced when I saw the debt of USA has raised to more than 100% of its GDP. But I saw other countries like Japan having over 250% of its GDP. And a lot of countries have debt near 100% of GDP. ...
0
votes
1answer
350 views

perpetual bond that yields 0%

As far as I understand perpetual bonds are endless and don't mature. So why would anybody invest in one that does not yield? You don't know when/if they are going to pay.
0
votes
2answers
99 views

Brent crude vs. USD market value [closed]

correlation != causation, but Brent crude and the USD are completely on twinkie paths Brent Crude USD exchange rate Why is it that when the price of oil drops, not only do you have more money to ...
1
vote
2answers
73 views

How do I calculate Future value adding fund charges?

Here is the statement on the NEST website. "We take a small percentage of the money going into your pot known as a contribution charge. This amount is 1.8 per cent." They then also charge £15 ...
1
vote
1answer
551 views

Why can't poor countries just print more money? [closed]

I know this is a really silly question that is really obvious, but what's stopping a country from just printing out a few more billion of their own currency and then using that money to buy goods from ...
7
votes
1answer
233 views

Why adjust for inflation annually, as opposed to realising it after the holding period?

Why do investors offset their annual returns against inflation, when inflation isn't realised until the end of the holding period (when the investor is actually spending the money)? An example: ...
6
votes
4answers
2k views

What exactly is a “derivative”?

I haven't been able to find exactly what a derivative means. It seems to be some sort of cross of insurance, stock, and lay-a-way. When I try to look it up, all I find is all the problems not ...
0
votes
2answers
127 views

What are the “perfect” conditions for selling a small private business?

As the title says. What the general opinion seems to be is that now is the best time ever to sell a small business because of low: interest rates, tax rates, and inflation, plus many large M&A ...
3
votes
0answers
72 views

What is the economically rational way to fund leasehold property management?

I am trying to find a company to manage the block of flats (apartment building) I live in. What is the economically rational way to pay for property management services, According to traditional ...
17
votes
8answers
6k views

What's an economic explanation for why greeting cards are so expensive? [closed]

Greeting cards sell for about $5-6 per card. For what is basically a piece of paper, that's pretty expensive. Yet, they're not exactly well protected. Anyone with photo editting software could ...
0
votes
1answer
205 views

calculation of real inflation rate in india?

How can I figure out the real rate of inflation in india? If I don't believe CPI as real and practical? We get the CPI numbers as inflation rate, but in my views those numbers are not the real one. I ...
4
votes
6answers
2k views

What is the opposite of a sunk cost? A “sunk gain”?

Here's an example of the sunk cost fallacy: You decided to buy a solar panel because you heard that you can make money from them over time. Unfortunately, you didn't do enough research and bought an ...
0
votes
1answer
113 views

Is there more money in pockets or in banks? [closed]

In America, or the world at large, is there more money in people's pockets---i.e., not within banks or institutions, etc.---or in banks or institutions, etc? Provide evidence and reasoning.
-1
votes
1answer
95 views

Is there any historical example that a market is shrinking down after competition? [closed]

I heard a story saying that the advertising market shrink down after Google entered. I doubt this strongly because Google is doing so well with its ads, though I never know what's the older days like. ...
3
votes
2answers
570 views

Is there a reason to buy a 0% yield bond?

Right now I can get a 1yr government bond that yields 0%. Is there any reason to buy such a bond? E.G. If the broker holding my accounts goes out of business is my "perceived low risk portion" of my ...
2
votes
2answers
155 views

Why are real-term bond yields systematically declining, and what does it mean for investors?

I'm having hard time understanding what is causing the trend below: In theory, since it is inflation adjusted I'd expect the yield to fluctuate with the economic cycle, but not systematically drift ...
1
vote
1answer
476 views

Why do both stock and bond seem overvalued in 2014?

The general wisdom is that when stock is overvalued, bond is undervalued, and vice versa. Why are both suggested to be in a bubble in 2014? Also, if one believes in tactical allocation, what asset ...
0
votes
3answers
226 views

What is the meaning of “$N industry”?

For example, in the sentence "Semiconductor fabrication is a $100 billion industry.", what exactly is being said?
0
votes
1answer
307 views

Why was there a spike in disposable income in December 2012? [closed]

If you go to: http://www.tradingeconomics.com/united-states/disposable-personal-income and look at December 2012, there was a huge spike in disposable income. Does anyone know the reason for this?
1
vote
2answers
2k views

Why does the stock market index get affected when a terrorist attack takes place?

The way I see it, the stock exchange is a market where shares of a company are traded. These trades are triggered by individual valuations by participants of what an investment in a company would be ...
1
vote
2answers
269 views

What does “basis points” mean in this context?

I read this sentence: Egypt's central bank cut its benchmark overnight deposit rate by another 50 basis points to 8.75 percent, its second rate cut in two months. What does basis points mean ...
5
votes
1answer
244 views

What are good investments to use as hedges when the Federal Reserve draws down quantitative easing?

Basically I think it is quite obvious that quantitative easing (QE) will be pulled back eventually and countries will start to tighten their monetary policy. When that happens, what kind of assets ...
1
vote
1answer
98 views

Economics: negative consumer sentiment following failure to upsell

I was recently at a bricks-and-mortar shop selling some equipment. I knew exactly what need I had and had a mental picture of the product I expected to purchase. The store offered two different ...
5
votes
1answer
354 views

Equity prices during currency devaluation — Mexico 1994 [closed]

If I own a company whose assets are 100 barrels of oil valued at $10,000 in some currency, and the currency's value suddenly drops by a factor of two, I would expect that my company is now suddenly "...
2
votes
2answers
3k views

Why don't the employment rate and unemployment rate sum up to 1?

According to Turkstat, the Turkish employment rate was 44.9 and the unemployment rate was 10.1 in December 2012. I would expect the unemployment rate to be 1 - employment rate. How are those numbers ...
12
votes
4answers
691 views

What is the economic explanation for the high cost of weddings?

I'm currently organizing my wedding and it seems as soon as you mention the W word to any restaurant or caterer etc. the price immediately double. I'm not even kidding either - I've even gone to a ...
2
votes
5answers
1k views

Why could rental costs for apartments/houses rise while buying prices can go up and down?

In this U.S. city, I have the impression that the rents of apartments and houses always go up, say, about a 5% per year, while the prices of buying them fluctuates throughout the same years. If my ...
6
votes
5answers
169k views

Account that is debited and account that is credited

As a non-English-native person, I somehow find it difficult to understand the following: When an account is said to be debited, what does this mean? How does this differ from an account that is ...