<11an>limit:2;categories:jobs|courses|conferences;disciplines:General Economics (JEL A)|Health, Education, and Welfare (JEL I)</11an> Fortunately, most economists - particularly researchers - have been able to home-office throughout the crisis, transitioning with some ease, with much of their work already reliant solely on access to a computer. This is reflected by almost two thirds of economists reporting that, besides the migration home, they’ve experienced no change to their work. In the words of one: ‘it’s all remained the same’. This, however, cannot be said of teachers, for whom the transition to online learning, while mostly possible, has invariably been a bumpy road. Capturing the prevailing mood, teachers described E-teaching as ‘difficult, time-consuming and boring’, bemoaned their lack of ‘technical help’, and spoke of increased ‘inefficiency’ that had led to ‘an increased workload’. Students mirrored this frustration, though for different reasons. They cited reduced tutor contact hours as a disruptive influence, and were also dismayed by the closure of libraries. For many, though, it’s the future that is the greatest cause of concern. The scarcity of job opportunities was reported multiple times as a primary consequence of the pandemic, a concern expressed often by those on the verge of graduation, or early in their careers. This development will be especially worrisome for those straddled with enormous student loan debt (American student loan debt stands $1.5 trillion) who now face an increasingly precarious future. The prospect of which, according to testimonies from this cohort, has prompted increases in ‘mental stress’, ‘anxiety’, and a fear of perpetual joblessness, all compounded by knowledge that, in certain areas, the worst of the pandemic could be yet to come. The demand for diminishing work was also noted to have negatively affected worker power, empowering the employer. Articulating this emerging reality, one economist predicted that ‘labor struggles for fair pay [would] continue in the long term’, while an economics PhD relayed, in slightly more dramatic terms, that labor relations at their workplace ‘were destroyed’. Another frequent story was that of ‘delayed promotions’, almost 10% of survey participants reporting a promotion postponed as a result of the pandemic. Epitomising this experience, one researcher explained that his promotion was ‘postponed because my research has stalled. I cannot go for visiting research stays in universities and research institutes locally and internationally. And without research, my work has been made redundant as I now do mostly teaching, lecturing and administrative work online from home.’ Such disillusion was not uncommon. A sizable number have also lost their jobs, around 6% of survey participants, and the prospect of this number increasing is having a significant effect, many noting a pervading ‘atmosphere of uncertainty’, aptly captured by one economist who spoke of the looming ‘threat of future redundancies’ that hovered over his workplace. Put in perspective, though, economics has, by-and-large, been able to work on through, placing it among the luckier industries. The discipline can also be both proud of the work it’s continued to produce and the role it’s assumed responding to the crisis. There’s little doubt - in the face of the pandemic economists have risen to the challenge. Complete Economics Salary Survey
That the world of work has radically changed we know, we see it before our eyes: kitchens have replaced offices; pajamas, suits; and housemates often now fill the space previously occupied by colleagues. But how have these changes - and others - been felt by economists around the world? Through a textual analysis undertaken in the INOMICS Salary Survey, we answer that question and, in doing so, paint an anecdotal picture of economists’ COVID experience.
Why you should be using a multi-channel marketing approach
Multi-channel marketing campaigns allow institutions to increase conversion rates by interacting with potential candidates (students, professors and researchers) at different stages of their decision process, using the best channel for that stage. For example, a candidate who has already visited your institution website is more likely to respond positively to a direct email campaign, while a young candidate who has not yet heard of your university/centre/company is more responsive to meeting representatives at a recruitment fair. Additionally, the investment in a multi-channel campaign is more controlled and reduces the risk of overspending on one channel. To be effective with a multi-channel campaign, it is necessary to set up goals, have a consistent message across the channels and implement a detailed system of analysis to be able to measure the return on investment from each channel in terms of quality of candidates, lead management and enrolments. Benefits of Multi-Channel Campaigns Better understanding of potential candidates thanks to better feedback: By using different channels, your organization can collect feedback and experience from different types of candidates. Additionally, platforms like social media are more likely to incentivize prospective candidates to communicate directly with your team, ask questions and contribute with ideas that will increase the value of your institution. Higher brand exposure: Looking for a new job or enrolling in a study program is a decision that is not taken overnight; on the contrary, it requires time and deep thinking. By advertising your opportunity directly on job boards or study program aggregators you will be targeting candidates who have taken a decision to make a change in their life or career. However, you are missing out on the opportunity to make an impression on passive candidates, not yet actively looking for your opportunity. Social media, blogs, apps, etc. can give you access to these passive candidates who will turn back to your institution once they feel ready to enrol. As a side effect you may also get an ambassador for your institution who will tell friends and colleagues about your opportunities. You can check here additional 10 tips to build a University brand online. Better budget distribution: A prospective student/employee who uses social media as their main job/program finding tool will not have the same profile as somebody who prefers online listings or email newsletters. Once your organization can identify the most effective channels to attract the most suitable candidates, you can then optimize your campaigns. Challenges of Multi-Channel Campaigns Effectiveness of your message: In a multi-channel campaign you do not only need consistency in your message but also to keep it effective. Regardless of the channel you use, the message should inspire people to take action and apply to your position, study program or conference. Detailed planned campaigns: The responsibilities with a multi-channel campaign do not stop once the message is out in different channels. Upon launching the campaigns, touch points with your prospective candidates need to be coordinated along with the setting-up of mini reminder campaigns per channel. Remember that the decision of enrolling in a new course or applying for a new job requires more than a one-time communication with the candidate. Results attribution: Previously we mentioned the need to have a detailed analysis system to measure the return on investment from each channel. It seems straight-forward to set up goals and a couple of key metrics per channel, however in realilty, to know what really triggers each enrolment can take time or need a personal follow-up. Depending on your budget, you may need to decide on approximate KPIs or to invest real time and effort knowing which channels brought your students, professors and researchers. Recommendation to Start Your Multi-Channel Recruitment Campaign Consolidate your database of leads: In order to manage your leads properly, it is important to have a single database of prospective candidates with the same information filled-in in their profiles. You could also add the source of the leads, in order to manage the conversion rates per source. There are multiple CRM systems available in the recruitment market; you just need to choose the right one according to your budget and expectations. Choose the marketing channels that you would like to use: The best way to choose the right marketing channels for your campaign starts with segmenting your market. By analyzing the profile of the ideal student for your program or ideal candidate for your position, and disclosing all touching points where your target audience interacts and consumes information, will help you to deliver your message effectively. Take into account lifestyles, hobbies, work routine of your target group. In this way you will find channels that offer a higher impact than traditional media. To explore more effective ways to target millennials, feel free to read further on how to market universities to a digital generation. Create consistency of messages and experience across all channels: The consistency of your message is highly important. Remember that regardless of the channel (social media, online catalogues, and email marketing, traditional media) you are competing for space in the mind of your target audience. Identify which are the selling points of your institution/program/job and which are the must-have attributes expected by your candidates. Be careful measuring results of your campaign: We have talked about the importance of measuring results and the challenge that this presents. The trick is to decide in advance the must-have and nice-to-have metrics. Decide which are the mandatory KPIs for decision-making and organize your team to collect them. For those metrics that are not listed in your mandatory KPIs, prepare yourself to step back in case they demand a lot of time and resources from your team Designing and implementing a multi-channel campaign can be a project that demands time and effort from you and your recruitment team. It may also seem to be expensive and it often requires resources that are not easily available at your institution. At INOMICS we have designed a special promotion to help your institution implement a successful multi-channel campaign. Thanks to our experience from last spring with the summer schools, we decided to implement our knowledge in content marketing, social media promotion and online listing to promote masters, PhDs, courses and online learning offers. From past campaigns, our customers attributed around 10% of the campaign results to our multichannel offer. If you are interested in booking a multichannel campaign for your program, you can contact us at info@inomics.com. Check INOMICS Multi-channel Offer
Multi-channel marketing is the practice of interacting with customers by using a combination of direct and indirect communication channels such as websites, online and offline catalogues, email, direct mail, mobile, messaging apps, social media, etc. Multi-channel marketing has been heavily used mostly in the retail industry by enabling customers to buy a product or service by using the communication channel of their preference. However this approach can also be very effective in the recruitment industry.
<11an>limit:2;categories:jobs|courses|conferences;disciplines:Microeconomics (JEL D)</11an> Principles of Microeconomics - N. Gregory Mankiw Now in its seventh edition, this textbook on microeconomics is one of the most widely-used and respected. Offering an in-depth overview of all of the fundamentals of the microeconomic discipline, it’s also a surprisingly accessible read for a dense university textbook. It’s arranged in short chapters, Mankiw himself is a highly respected economist, and it’s a great starting point even for laypeople. Freakonomics: A Rogue Economist Explains the Hidden Side of Everything - Steven Levitt and Stephen J. Dubner No list of microeconomics books would be complete without the extremely famous, and very enjoyable, Freakonomics. Levitt and Dubner’s book, a collection of articles, focuses on the application of economic methods to everyday things. There are chapters on cheating, drug dealing, the KKK, and even naming children, among other things. It was such a huge success it spawned a blog, a radio show, a sequel, and even a film. Prices and Quantities: Fundamentals of Microeconomics - Rakesh V. Vohra This book attempts to change up exactly how microeconomics is taught, by beginning with the most basic principles which only involve one variable and steadily getting more complicated. What this achieves is that the mathematics required to fully grasp microeconomics is simplified, in that the calculus steadily gets harder as the book progresses. Vohra also uses real-world examples to make concepts easier to grasp, making this a great addition to your microeconomics library. Thinking, Fast and Slow - Daniel Kahneman In short a summary of Kahneman’s research over the course of several decades of highly successful economics work, Thinking, Fast and Slow is much more than that. Really, it’s a book about how human judgment can’t really be trusted - and how knowing this information can change how you see your own decision-making processes and change your life. The book has sold over one million copies and is also an important behavioural economics book. Microeconomics - Paul Krugman and Robin Wells Much the same as the duo’s book on macroeconomics, Krugman and Wells’ book explaining the fundamentals of microeconomics is accessible, nicely written, and covers most everything you’ll need to know about the discipline. It tries its best not to use jargon when explaining its concepts, and uses plenty of real-world examples to make them as easy to understand as possible. This is a great book if you want to get away from the dense language and confusing jargon of economics and easily learn about microeconomics which, after all, isn’t rocket science!
Anyone in the midst of their undergraduate degree will know of the two main tenets of economics: micro and macro. If you’re looking for the best macroeconomic books, you can head over to our article on that topic, because in this piece, we’ll be going through some of the most useful and interesting microeconomic books which will help you get up to speed on all of the fundamentals of the discipline. And remember, these books aren’t only for students - laypeople who are interested in the subject can also benefit from picking up one of these tomes. And what better time to do some reading than when stuck inside during the pandemic?
Check out our job listings <11an>limit:2;categories:jobs|courses|conferences;disciplines:Macroeconomics and Monetary Economics (JEL E)</11an> 1. Macroeconomics: Principles, Problems, and Policies - Campbell McDonnell, Stanley Brue, Sean Flynn Perhaps the most essential book on macroeconomics you will ever need, this textbook is often all you need to pass an undergraduate course in the discipline. Weighing in at nearly 600 pages, it is an extremely comprehensive textbook which gives in-depth information on all of the major aspects of macroeconomic theory. While it deals with complex themes and mathematics, it is written in an accessible style, making it great for beginners but compiling enough information to be useful for advanced learners too. 2. The Future of Capitalism: Facing the New Anxieties - Paul Collier In this important book, renowned economist Collier highlights the multiple failings of capitalism and how these have affected the relationships between different groups in society. Drawing from his own experiences from working-class Sheffield to uber-academic Oxford, he then tries to show us how we can fix capitalism - and make a better future for us all. 3. Macroeconomics - Paul Krugman, Robin Wells A slightly less advanced work but one written with the purpose of explaining economics in an easy to understand way, with examples and using the storytelling for which Krugman is best known, Macroeconomics is a great introduction to the core principles of the discipline. The mathematical side of economics is toned down massively to make the ideas easier to comprehend, and much of the book is related to real-world events, specifically the 2008 financial crisis, about which Krugman wrote extensively. Still, the book is comprehensive at nearly 600 pages, and is a perfect supplement to the more mathematics-focused side of economics. 4. Gigged: The Gig Economy, the End of the Job, and the Future of Work - Sarah Kessler Kessler in this book outlines a neglected, or at least seldom thought-about, part of the economy: gig workers. A symptom of the digital era, the freelancer receives none of the benefits of full time work - like medical insurance or holiday days - but is able to pick their own hours and work the jobs they want to work - if they can find them. Almost a social study, Kessler’s work follows multiple individuals doing various forms of gig economy work to answer the question of what our job markets, and economic system, will look like in the very near future. 5. The Willing World: Shaping and Sharing a Sustainable Global Prosperity - James Bacchus As climate change only gets worse and an environmental catastrophe looms, James Bacchus turns our attention back towards an idea that has only become less popular in recent times: globalisation. In The Willing World, though, Bacchus convincingly argues that the best way to solve the crisis - and to help fix our broken institutions - is through international institutions and global cooperation. The rules and regulations he argues must be put in place in order for us to start seeing our economies and our environment as one and the same must be legally binding, under an international rule of law, so to speak - and he outlines how this could be done.
If you’re currently in the throes of an undergrad degree in economics, or even if you’re just a layman looking to brush up on your macroeconomic knowledge, it’s essential you have the right literature to help you keep up to date. There are plenty of textbooks out there which purport to be the best way to get to grips with the discipline, but some are, naturally, better than others. On top of that, there are plenty of more popular economics books which deal with a specific topic in more detail. So without further ado, INOMICS brings you the list of the best books on macroeconomics.
Macroeconomics and Monetary Economics (JEL E)
Browse our finance economics job listings Investment banking Investment banking is a high pressure, high reward sort of job. It requires quick thinking, the ability to remain calm under pressure, and the ability to predict outcomes of complex systems. If this sounds appealing to you, then you could be suited to investment banking work. Such jobs are generally available in the financial centres of big cities like London or Frankfurt and tend to be in organisations which are quite formal and rigid in their structures – for example, you'd be expected to wear a suit, and there can be a rather competitive attitude between employees. It is also typical to work long hours and sometimes on the weekends. Some people will find this atmosphere stressful and off-putting, but people who thrive in a fast-paced environment may find it highly stimulating. <11an>limit:2;categories:jobs|courses|conferences;disciplines:Financial Economics (JEL G)</11an> Commercial banking In contrast to an investment bank, which generally provides services for the financial needs of large corporations, commercial banking is the sector which provides financial services such as deposits, loans, and basic investments for corporations or individuals. Possible jobs in commercial banking cover a wide range of specialities, such as relationship management, strategy, business development, and businesses analysis. These roles require strong people skills and the ability to manage employees or customers, so they are suited to people who know how to motivate others. Financial management Financial management refers to the planning, monitoring, and controlling of an organisation's monetary resources. Many organisations require financial management, from big businesses to small non-profits. As a job, it requires the ability to plan ahead and to stay on top of the many incoming and outgoing streams of revenue, meaning that it is suited to people who are highly organised and who can keep track of many things at once. Financial managers generally work with other high-level managers, but not necessarily with other economists or money people. So if you want to work as a financial manager in a smaller organisation, you'll need to be able to communicate clearly with non-experts who may not have much knowledge or experience in financial matters. Asset Management Asset management is a growing field which is potentially very lucrative. It is the making of investments on behalf of an individual or a company, in order to increase their total assets over time. Working in asset management requires you to make smart investments on behalf of your clients, and so built up their funds without risking too much. As well as the extensive knowledge of finance which you should gain from your financial economics degree, to be an asset manager you will also need strong quantitative skills as you will be digging through a large amount of data and possibly doing tasks like modelling which require statistical knowledge. As it is essentially a job proving a service, you will also need to be communicative and capable of managing clients and your staff. This work is suited to someone with a good head for numbers and a reasonable approach to risk, who isn't scared of moving around large amounts of money.
If you're working on a degree in economics with a specialisation in finance, or if you're considering doing such a course, then you might be wondering about the career options that it will open to you. Here are some of the top career paths for financial economists.
Perhaps a worse indictment, however, is that for many they never had much effect. They never came close to capturing their actual reality: the shortage of food, the fragmentation of community, the political alienation. While coping with these concerns, that the 1% had further increased their collective wealth by X trillion dollars was only ever background noise, a little salt on the wound. Statistics of this kind may sell newspapers, but they don’t capture experience. There's no let-up Alas, such is the prevalence of inequality, it’s at risk of defining our time. Among the Organisation for Economic Co-operation and Development (OECD) countries, it’s reached a record high, and economists see little sign of it abating. We now live in societies divided: the haves and have nots; those with opportunity and those denied; inhabitants of good, desirable areas, and the left-behind, the forgotten. In a moment in which fracturing communities need healing, inequality undermines any efforts, driving its big wedge into the ever-growing in between. Indeed, it’s only in the last 15 years, or so, that the full impact of these divisions have been assessed in earnest, and the array of inequality’s far-reaching effects laid bare. Some are not so easily identifiable, let alone quantifiable. And yet, an appreciation of them is essential if the true nature of inequality is to be understood. The reality beyond the money-oriented stats; inequality as experienced on-the-ground. Academics should be thanked for filling the void, as there now exists a robust body of research concerning the psychological effects of inequality, exploring, in particular, the trust it diminishes among individuals, and for institutions; the sense of community it erodes; and its links to growing political apathy. It’s these more insidious impacts, often obscured from popular view, that are of interest here – and it’s no exaggeration to say, they run deep. Solidarity on the wane Research by sociologists Marii Paskov and Caroline Dewilde has shown that living in unequal societies fundamentally changes the way people interact with those living around them, and, more broadly, how they perceive their community. Most notably, inter-societal solidarity – that is the willingness of individuals to try and improve the living conditions of other members of their community – suffers. As a general rule, the solidarity expressed by an individual is stronger ‘toward people with whom there is less social distance’, social distance describing the distance between different groups within the same society. Rather unhelpfully, inequality creates the opposite conditions, increasing the social, and also the mental space between community members. This distance limits the individual's ability to recognise the indirect benefits they, too, stand to enjoy by helping others. Thus, the notion that improving one person’s life benefits the whole of society is quickly forgotten. As the collective traits of generosity and compassion reduce, and social cohesion is damaged, the slippery slope is then further greased. The same study shows that declining solidarity is quickly reflected in dwindling public support for government-led redistribution, which, for communities facing high levels of inequality, is exactly what is most needed. Mistrust Economist Henrik Jordhal has looked further, linking greater social distance not just to estrangement, but to higher levels of mistrust. Specifically, the growing belief that other members of one’s community are fundamentally different from oneself. Exactly why this is so dangerous requires little imagination. Scepticism of others prevents the establishment of relationships, setting in motion a vicious cycle: social distance leads to mistrust which leads to further social distancing. Divisions are sown, consolidated, and communities fragment – often, to give things a volatile edge, on ethnic lines. Suspicion pervades the air. And sometimes, violence can follow. Moreover, the work of Professor Frank J Elgar has shown that societies with low levels of trust struggle to create the social supports and connections required to improve the health, and allow for the comfortable ageing, of its members – even outside of a welfare state context. Communities, in effect, err towards atomisation. An individual's welfare, regardless of age, is no longer considered a collective concern, and is seen solely as the responsibility of the individual – and, thus, Thatcher’s dream is realised. Political apathy Declining trust is not exclusive to individuals, but extends to people’s faith in institutions. In a research paper exploring the impact of inequality on values and attitudes, social scientist Frederic L Pryor found that people in less equal countries had less interest in politics, less confidence in their sitting parliament, and often bemoaned a societal lack of respect for authority. And his work is no outlier. Associate professor Frederick Solt argues in a similar vein. His analysis has demonstrated that higher levels of inequality ‘powerfully depress political interest, the frequency of political discussion, and participation in elections’. It’s hardly surprising either. For how is it possible to reconcile the optimistic, soundbite promises of politicians with the biting reality of a life stung by inequality? Successive governments from across the political spectrum have tried (some harder than others) and failed to arrest the trend toward inequality. As things deteriorate, disillusionment is, in many ways, the logical response. To make matters worse, the apathy Solt’s work observes applies to all but the most affluent. With their political intentions unperturbed, and enjoying an ever-growing slice of the economic pie, they are even better placed to set the political agenda, a privilege that can be – and often is – used to ring-fence wealth, exacerbating the original problem. Self-reinforcing And herein lies one of the larger problems. Inequality is reinforcing itself, it’s digging in. Those benefiting from its advance – maybe predictably – are unwilling to surrender their place at the top of the tree. But surrender they must. Before that happens, though, one prohibiting fallacy needs dispelling. Often observed in unequal societies is the collective belief that the wealthy elites (most of whom were in fact born rich), have risen to their position by virtue of superior talent, endeavour, and dedication rather than their birthright, while those languishing at the bottom owe their squalor to idleness and profligacy. This unhelpful internalisation, which attempts to legitimise the status quo, is patently untrue. Inequality stymies social mobility, and although just one of its many causes, its eradication would greatly improve the meritocratic nature of our unequal world – and make people happier. When former IMF chief, Christine Lagarde, is compelled to say that, ‘reducing excessive inequality is not just morally and politically correct, it is good economics’, you know it’s time to act – even the neoliberals are conceding it's gone too far. We must demand that our politicians address the growing gulf. For there is nothing natural or inevitable about the scale of inequality that we endure. It is a choice and it has to be reversed.
Inequality is rampant, we hardly need telling. Rarely does the print media pass up an opportunity to remind us. We stand inundated by an endless stream of statistics – on scales barely fathomable – each one more depressing than the last. For instance, it’s widely known that: ‘8% of humanity takes home 50% of global income’; that ‘the top 1% own 45% of the world’s wealth’; and how could we forget that ‘the 26 richest people on earth had the same net worth as the poorest half’. As shocking as these stats once were, they’re now dishearteningly familiar; we can recite them unassisted; we are numb to them.
Public Economics & Economic Policy (JEL H)
Economic Development, Innovation and Growth (JEL O)
Sudden Delivery Disruptions Due to Pandemic Will Not Go Away Any Time Soon
A couple of steps short of humanitarian disaster and incalculable damage to the environment At the end of the year around Christmas, up to 10,000 trucks headed from Dover to Calais via the Eurotunnel. When France suddenly closed its border with the UK, all trucks and their drivers that were still in Britain got stranded in the ports without any information about when they would be able to continue their journeys, and without food or access to essential hygiene facilities. Truck congestions near the ports in Kent were so bad that they even caused local traffic disturbances in some areas. Police were brought in to help organize the HGV queues. With the chaos difficult to contain, a possible humanitarian disaster in Kent seemed a real possibility. A huge number of people carrying various freights ranging from foodstuffs to goods and products were stuck, and some of the stranded products required special storage conditions available only at their destinations. Movement of unaccompanied freights (containers, etc.) was not stopped. However, how quickly the carriers regroup could transfer the freights stuck on the trucks to sea or air freight containers remained unclear, for the obstacles in their way were significant. Was it even possible given the trucks were tightly parked side by side in an open field inaccessible to other vehicles or reloading equipment? In any case, switching all land freights to sea or air freight transportation is impossible in a short time, as their capacities are limited. France remained resolute and stated that only drivers with a negative COVID-19 test would be allowed in. This meant that the UK were obliged to arrange mass testing very quickly, bringing in the army and fire service for the task. As a result, several thousands trucks crossed the Eurotunnel on December 25 alone. This created an additional load both on the tunnel and its servicing companies, and was undoubtedly a huge burden on the environment at both ends, owing to the large number of trucks and the huge amounts of exhaust gases that were generated. How prepared are countries for a sudden stop of deliveries? From the European perspective, the disruption of deliveries from Britain is no real disaster as there are other suppliers available. From the British perspective, on the other hand, no deliveries coming in from the continent is a real issue. Where will the necessary goods come from in the absence of long-term stocks? And how will Britain obtain goods that are not made in sufficient quantities domestically? The situation at the channel was further hampered by the timing – it's during Christmas season that trade companies generate their largest turnover. Ian Wright, chief executive of the British Food and Drink Federation (FDF)1, noted that France’s decision to block accompanied freight from the UK to the continent “can cause serious disruptions to fresh food supply.” While at the same time, the British Retail Consortium (BRC)2 stated that short-term haulage suspension would not stop retail trade, as retailers had created stocks. It seemed that nobody could predict how long the ban would last. The influential newspaper, The Guardian, estimated that around 3000 trucks carrying vegetables, flowers and plants come to the UK from Europe every day. According to The Guardian, it is the small shops, local markets, restaurants and catering companies, together which supply up to 40% of Britain's fruit and veg, that will most likely experience shortages of those foodstuffs should there be further problems. Analyzing the situation, theconversation.com3 journalists pointed out that Brexit risked just-in-time delivery systems, which were easily disrupted, and that leaving the EU, the source of a third of Britain's food, opened new risks. Brexit had not yet happened when the British first experienced what the disruptions of deliveries meant, even if only for a few days. “We were not surprised that concerns about food shortages emerged when France and over 40 countries imposed travel or truck movement bans on the UK,” theconversation.com noted. This situation has highlighted a problem which has not been openly or frequently enough discussed: whether we are prepared for a possible halting of logistics, due to COVID-19 or anything else (natural or technogenic disaster, etc.). I believe that it’s time for Britain, and others, to check their stocks of essential goods and develop plans B, C, etc. in case of any further unexpected supply disruptions. Risk assessment is more important than ever COVID-19 is still tearing the world apart. Although active vaccination campaigns have already begun, it is clear that this year we will not return to normal life as we have known it. Currently, there are no available data on the losses suffered by the UK haulers and exporters due to closure of the border with France and other countries. At the height of the crisis, haulers cautiously said that they would “account losses as precautionary measures to stop the spread of COVID-19”. But this is no long-term solution. Representatives of Nottingham-based, Baxter Freight, stated that the delays had cost the industry “millions of pounds an hour”, while director of Peterborough-based, Chiltern Distribution, Paul Jackson estimated that freight delays had cost the company “more than 5000 pounds a day”. During the crisis, the company had also looked into the possibility of redirecting freights via Belgium, but the earliest available supply corridor available was on January 4. The Scottish Seafood Association has also declared that it will demand compensation for the loss of profit from the Government, as during Christmas season their goods did not make it to their target markets in Europe. Jimmy Buchan, chief executive of the SSA, said that “people’s livelihoods and jobs are under threat”. Clearly, the events in the UK showed that every hauler must focus on potential risk analysis and crisis solutions more than ever before. Entrepreneur, Rolands Peterson, is an economic, transport and logistics expert. He pays particular attention to developments in the global economy. 1 Food and Drink Federation (FDF) 2 The British Retail Consortium (BRC) 3 https://theconversation.com/food-shortages-brexit-and-covid-19-how-britains-problems-converged-at-christmas-152412
At the end of 2020, chaos in the transport industry ensued after many European countries, including France, decided to ban all travel from the UK. The reason was the rapid outbreak of a new COVID-19 strand. Ultimately, the industry was not ready for such a turn of events. It is incredibly difficult to prepare for what came to pass: in the morning everything started as usual, and then a few hours later, all change and a 180-degree turn.
Urban, Rural and Transportation Economics (JEL R)
Browse our job listings for economics opportunities University courses on Innovation Economics Naturally, one of the best ways to learn about innovation economics is to study it as part of an academic course. Courses on innovation economics are most often found within economics departments, but they may also be taught in business schools because of the discipline's close links with entrepreneurship. You can see examples of some courses at highly regarded universities which specialise in innovation economics below: Econ 410b. The Economics of Innovation - Undergraduate course, Yale University, US Economics of Innovation - Undergraduate course, Nottingham University Business School, UK Economics of innovation - Master's course, École polytechnique fédérale de Lausanne, Switzerland LUBS2665 Economics of Innovation - “Broadening” module for undergraduate students, University of Leeds, UK Upcoming conference on Innovation Economics If you are more advanced in your career – for example, if you are a PhD student or postdoc with an interest in this field, then you might consider attending a conference. The biggest conference in the field is the annual “Conference on Innovation Economics”, an international conference. Obviously during the pandemic this may be difficult, but at some point the conference will begin again. Thirteenth Annual Conference on Innovation Economics Academic journals on Innovation Economics For senior researchers who need to know about the latest research, or for students who are trying to learn about the field, academic journals can be of great help, keeping you up to date with the latest findings in the field. Here are two journals which specialise in innovation economics: Economics of Innovation and New Technology Published by Taylor & Francis, this journal is “devoted to the theoretical and empirical analysis of the determinants and effects of innovation, new technology and technological knowledge. It aims to provide a bridge between different strands of literature and different contributions of economic theory and empirical economics.” Innovations – Journal Of Innovation Economics & Management (I-JIEM) Co-edited by the Research Network on Innovation (RRI) and De Boeck Université, this journal is focused on “discussion of new innovation strategies of firms and organization which have an impact on the economy and society.” Blogs on Innovation Economics For a more casual but very up-to-date read, you might want to check out blogs like the one below. This is written by a professor of innovation economics at UCL. Blog of Mariana Massucato, Professor in the Economics of Innovation and Public Value at University College London (UCL) Books on Innovation Economics Finally, the best way for a newcomer to the field to get a really good handle on it is to read a book on it. There will be plenty of in-depth information to give you an overview of the subject and to fill in any gaps in your understanding. Try either of the books below: Handbook of the Economics of Innovation Published by Elsevier and edited by Bronwyn H. Hall and Nathan Rosenberg, this book promises to 'examine the genesis of technological change and the ways we commercialize and diffuse it. Innovation Economics: The Race for Global Advantage Published by Yale University Press, and authored by Robert D. Atkinson and Stephen J. Ezell, this books discusses the global race for innovation advantage, suggesting that America has some catching up to do.
Innovation Economics is a branch of economics that focuses on (rather predictably) innovation, alongside the study of technology, knowledge, and entrepreneurship. It aims to understand where new ideas come from, and how we can put forward policies which will encourage the development of new ways of thinking. As many nations move away from an industrial model of production and towards a knowledge-based economy, the economics of innovation becomes more and more relevant. Although it is a fairly new field, innovation economics has risen to prominence quickly over the last few years. The following is a list of links and resources to help teach you and keep you up to date on all the latest developments in innovation economics.
Model assumptions<o:p></o:p> Bertrand competition is price competition in an oligopolistic market in which two or more firms produce a homogeneous good. Let's have a quick look at the main assumptions of the model:<o:p></o:p> Homogeneous good: The goods that are being produced and sold by competing firms are completely identical in the eyes of the consumers. Consumers have no preference for either of the firms and therefore buy from the firm offering the good at a lower price.<o:p></o:p> Competition in prices: In contrast to Cournot or Stackelberg competition, firms do not compete in quantities but in prices. This means that each firm sets the price for its product with the aim to maximize its own profit (and of course taking into account the prices set by competing firms).<o:p></o:p> A standard example for Bertrand competition is the market for gasoline. Petrol stations announce the price per liter and the consumers (drivers) decide at which petrol station they refuel their car. As petrol is a homogeneous good, most of the consumers will opt for the petrol station with the lowest price (of course, we must assume the petrol stations in question are located next to each other; otherwise convenience of location can cause these goods to be heterogeneous).<o:p></o:p> In the unique Nash equilibrium of the Bertrand competition model, firms set their prices equal to marginal costs and make no profit. Let us try to understand why this happens. Suppose there are two firms that produce a homogeneous good at constant marginal costs denoted by \(c\) and compete by simultaneously setting prices. Consumers buy from the firm charging the lower price, because they perceive the goods sold by the two firms as perfect substitutes. We will assume that the demand is split equally if firms charge the same price. The profit of firm \(i\) is given by \(\pi_{i}=(p_{i}-c)D_{i}(p_{i},p_{j})\) if there are no fixed costs, where \(D_{i}(p_{i},p_{j})\) is the demand faced by firm \(i\) if firm \(i\) charges price \(p_{i}\) and firm \(j\) charges price \(p_{j}\). The demand \(D_{i}(p_{i},p_{j})\) faced by firm \(i\) depends on the prices of both firms: If firm \(i\) charges a higher price than firm \(j\) (\(p_{i}>p_{j}\)) all consumers buy from firm \(j\), firm \(i\) has no demand and makes a profit of zero. If firm \(j\) charges a higher price then firm \(i\) (\(p_{j}>p_{i}\)) all consumers buy from firm \(i\) and firm \(i\) makes a profit of \(\pi_{i}=(p_{i}-c)D(p_{i})\). If firms \(i\) and \(j\) charge the same price (\(p_{i}=p_{j}\)) demand is split equally and firm \(i\) makes a profit of \(\pi_{i}=(p_{i}-c)\frac{1}{2}D(p_{i})\). So why will firms price at marginal costs in equilibrium? To understand this, suppose that two firms, let us call them Airbus (firm \(A\)) and Boeing (firm \(B\)) produce the same passenger plane at marginal costs equal to 10 million US Dollars. Customers buy from the firm charging the lower price (in this case, customers would include militaries, airlines, or airplane leasing companies that then lease airplanes to airlines). Let us say that Boeing charges a price above marginal costs, for example 50 million per plane (\(p_{B}=50\)). Now Airbus has three options. It can charge the same price, a higher price or a lower price. Clearly, a higher price does not make much sense, because all customers would remain with firm \(B\). Setting the same price means that the two firms share the demand equally and each firm makes a profit of \(\pi_{i}=\frac{(p-c)D(p_{i})}{2}=20D(p)\). If firm \(A\) charges a price below \(p_{B}\), the highest price it can charge to get all customers is a price that is a little bit lower than the one of firm \(B\), that is, 49.99 million US Dollars. Now Airbus obtains the entire demand and makes a profit of \(\pi_{A}=39.99D(p_{A})\). This profit is higher than the shared profit at equal prices if firm \(A\) charges a price only slightly below the price of firm \(B\). But of course, if Airbus charges a price slightly below the price of Boeing, then Boeing has no demand and makes a profit of zero. By charging a slightly lower price than Airbus it can obtain the entire demand and make a positive profit. Put differently, each firm wants to undercut the price of the rival to obtain the entire market demand. The incentive to undercut the rival only disappears when charging a lower price does not increase profits, which happens at a price equal to marginal costs. If the competitor prices at a level equal to marginal costs it does not make sense for the other firm to charge a higher or lower price. (At a higher price, the firm has no customers; at a price below marginal costs the firm makes a loss). In Bertrand competition, this result is independent of the number of firms, which means that even if there are only two firms in the market prices are equal to marginal costs and profits are zero (as in perfect competition). <11an>limit:3;categories:Master's Programs;disciplines:Economics</11an> Let’s have a look at the best response functions of symmetric firms in a Bertrand game as shown in the figure below. The blue line is the best response function of firm 2 for a given price \(p_{1}\) and the green line is the best response function of firm \(1\); \(p_{M}\) denotes the monopoly price. If you look closely you see that the green line is slightly below the 45-degree line (at points on the 45-degree line both firms charge the same price) if the price of firm 2 is above marginal costs and below the monopoly price. For any price charged by firm 2 in this interval, firm 1 will charge a price slightly below. The same is true for firm 2, of course. The best response functions are upward sloping because when a competitor has a higher price, it's optimal for the other firm to charge a price higher than their current price, but just below the competitor’s new high price. The intersection of the two lines (the red dot) represents the unique Nash equilibrium of the game. There is only one point at which firms are playing a mutual best response and no firm has an incentive to deviate given the price chosen by the competitor. As we can see in the figure, this is the point at which the price is equal to marginal costs. Figure 1: best response functions Further reading In Bertrand competition, when firms are not equally efficient - meaning one firm has lower marginal costs of production than the other firms - then the firm with the lowest marginal cost will obtain the entire demand and make a positive profit. Spulber shows in “Bertrand competition when rivals’ costs are unknown” (The Journal of Industrial Economics, 1995) that both firms price above marginal costs and obtain positive profits if the firms do not know the cost function of the competitor. Good to know In real-world markets, firms usually make positive profits. Why is that? First of all, firms rarely offer perfectly homogeneous goods. Even though the physical good that two firms are selling may be the same, goods produced or sold by different firms are not perceived as being identical (perfect substitutes) by consumers. Consumers may prefer to buy a good at a particular firm for a variety of reasons. For example, the firm's shop might have a more convenient location, consumers might be loyal to a specific brand, or perhaps different services are offered with the good. Second, in the classical Bertrand game firms interact only once. In real world markets, however, the same firms interact repeatedly day after day and may cooperate to maintain prices above marginal costs. Third, firms may be capacity constrained which means that they might not be able to produce enough to serve the entire market. As a consequence, the firm charging the higher price will not lose all customers to the competitor because the competitor cannot produce enough to serve the entire market. So, a firm in this situation can make a positive profit even if it charges a price above marginal costs. <o:p></o:p>
Bertrand competition is a model of competition in which two or more firms produce a homogenous good and compete in prices. Theoretically, this competition in prices, providing the goods are perfect substitutes, ends with the firms selling their goods at marginal costs and thus making zero profits. The result is also called the Bertrand paradox, named after the economist Joseph Bertrand (1822–1900).
COVID-19 and the Effect on Female Employment and the Gender Pay Gap
However, along with impressive scientific advances, have come huge economic and societal costs, many yet to be fully counted. In particular, lockdowns - and all their attendant economic woe - are reversing decades of progress made narrowing the gender pay gap and improving working conditions for women. Largely, this is because women are overrepresented in many of the industries hardest hit by societal shutdown, namely service, retail and entertainment. It’s estimated that 40% of all employed women worldwide, that is 510 million women, work in these sectors. Paid domestic workers - those working for private households - make for an illustrative example. According to ILO statistics, nearly 55 million domestic workers, two thirds of whom are women, have reported being significantly affected by job losses or reductions in working hours and earnings in the last few months alone. In the Global South, many of the problems women have faced stem from their greater reliance on informal employment, employment which often lacks protection by legal and regulatory frameworks, and therefore has left them more vulnerable to the ongoing economic downturn. The ILO’s Global Wage Report 2020/21 provides a broader context. Referring to data collected from over 150 countries, it estimates that, excluding wage subsidies, women globally lost 8.1% of their wages in the second quarter of 2020, compared to 5.4% for men. According to the report, this discrepancy is mainly accounted for by the difference in wage loss due to reduced workings hours: ‘while the average difference in wage bill losses caused by lay-offs was smaller than 0.4 percentage points between women and men, the average wage bill loss due to the drop in workings hours was 6.9% for women compared to 4.7% for men’. Turning to the field of economics, the INOMICS Salary Survey shows that the economists’ experience is not entirely faithful to these broader trends. Of the almost 2000 participants, 38% of male economists reported that their position had been negatively affected by the pandemic, compared to 34% of their female colleagues. Unemployment rates, on the other hand, were more in sync with the ILO’s findings, 11% of female respondents reporting unemployment, compared to 7% of men since the start of the pandemic. It should be pointed out, though, that INOMICS’ data suggests unemployment was higher for female economists before the pandemic, which may account for some of the difference. Still, these numbers fail to tell the full story, and do not convey the broader impacts lockdown measures have had on the gendered division of labour. As the majority of domestic tasks disproportionately fall to women, many have found themselves increasingly stretched, burdened by homeschooling responsibilities, never-ending childcare, and countless other domestic responsibilities that ‘stay at home’ rulings have imposed. Touching on her personal experience, one female economist reported that she was ‘expected to achieve the same outcomes [by her employer] while working from home and homeschooling the children’, meaning her workload had actually increased during the pandemic. Of course, the situation is a developing one, subject to great change, and is contingent, in large part, on government responses which have varied enormously. INOMICS is keeping track, and will keep you updated, on all further developments. You can still fill out our salary survey for economists. Data filled in will be used for future reports. For our full salary report please visit our salary report page.
Less than a year on from COVID’s genome sequencing, vaccination programs are being rolled out around the world. And while the pandemic is far from over, it would appear we’re approaching its endgame, arriving there faster than anyone dared hope. The previous fastest ever vaccine to be developed was for Mumps - and that took four years.
Jobs for Economists in the Government: The Right Career to Consider?
Regardless of where you’re from, or where you’d like to work, however, every government employs economists, and it’s easy to argue that they’re needed now more than ever - though in the weird times of the pandemic, finding a government job may be more complicated. Ready for the search? Check out our job listings Security and Stability Traditionally, working for the government meant more job security than working in the private sector. While this may no longer be true across the board, it is still the case in many countries. In this post, we want to focus specifically on jobs within the government itself, not including public sector jobs in national banks or public universities, two areas where job security is much less concrete than previously thought. Looking beyond these two branches, the types of jobs available to economists are quite diverse. For instance, if you are a recent graduate looking for work, you should remember to think outside the box and look to governmental areas not exclusively connected with economics, such as the Patent and Trademark Office, the Department or Ministry of Transportation, Commerce, Labor, Health, Defense, or even the military. In a post a couple of years back, Tyler Cowen of Marginal Revolution examined the breakdown of economists across U.S. government departments, not including the Federal Reserve. Interestingly, he found that the Department of Agriculture was the second largest employer of economists after the Department of Labor. That’s a good bit of info to keep in mind when sending out applications! Moreover, many governments also offer traineeships or internships for recent graduates, which can be a great way to get your foot in the door while gaining experience. In the UK, there is a professional network called the Government Economic Service, which offers positions at all levels to UK citizens, EU citizens and others. Intergovernmental Agencies and Money While not every government has a coordinated core of economists, there are also many intergovernmental agencies to keep in mind. For example, the Organization for Economic Cooperation and Development (OECD)hires economists of all backgrounds and specializations to work on a wide range of issues. Within supranational governmental bodies, such as the European Union, there are also myriad departments looking for qualified economists. With institutes and branches across Europe, the opportunities for economists within the EU are quite vast. Furthermore, there’s salary to consider. In the U.S., economists employed by the federal government earned an average of $106,850 per year as of 2012, according to the Bureau of Labor Statistics. While such a substantial salary might not reflect the reality of every country, high-level economists do tend to receive hefty remuneration across the board, making government positions quite sought after and worth aiming for. Additionally, remember that in this day and age choosing a career is never a straight path. If you can’t imagine working in the government for your whole life, that doesn’t mean you shouldn’t apply for government jobs right now. There are plenty of incredibly successful people who started in government positions then went on to make an impact elsewhere. For instance, Sheryl Sandberg, who, prior to becoming the COO of Facebook and a world-renowned author, gained valuable experience working for the Secretary of the Treasury. Lastly, when searching listings for government jobs, remember to look at your country’s job portals as well as other platforms, including INOMICS. Sometimes bureaucratic sites lack regular updates, so it’s best to peruse other avenues as well to make sure you’ve seen everything out there.
When discussing jobs in the government, the type of work that comes to mind is most likely influenced by your particular background. In countries in which large segments of the economy are nationalized, it’s possible to become a civil servant in nearly any field. In other places, your options might be more limited.
Check out more of our study advice here 1. Preparation The best way to prepare for an oral exam is the same way that you would prepare for a written exam or a presentation – be truly comfortable with your material. This doesn't mean that you need to memorise every single possible relevant fact – in fact, specific factual knowledge is less important that a solid overall understanding of the topic. To show that you're really confident with the material, it's good practice to read up on arguments both for an against any particular position or issue which you might have to discuss. Then when you're asked about an issue, you can mention that this is one way of looking at it, but this contrary position raises good points too. This will show that you have a nuanced understanding and aren't single-minded in your focus on one approach. Remember that no one is expecting you to have simple answers to the deep and complicated problems in your field, rather, the examiners are looking for indications that you understand the scope of these problems and are capable of thinking about them and discussing them in an academically mature way. 2. Controlling your nerves It's inevitable that you'll feel nervous before the exam, but there are ways to deal with this. Firstly, avoid coffee or other caffeinated drinks for a few hours before the exam, and switch to drinking water instead – the last thing you need when you're nervous is a ton of extra energy making you even more jumpy! Another good tip is to get yourself outside and engaging in some light physical activity before the exam – so arrive 20 minutes early, and spend 15 minutes walking around the block. Also, if there are other exam candidates waiting around, go and chat to them and make an effort to be positive and friendly. These people aren't your competition, they're your peers, and having someone to smile at you and wish you luck before you go into the exam can be a surprisingly big comfort. 3. Dealing with the examiners' questions During the exam, if you're unsure about the question being asked, you can absolutely ask for clarification. Academics have a tendency to sometimes talk at length, including when they are acting as examiners, so it can be hard to grasp the key element of what they're asking you. If possible, try to frame your request for clarification as a choice between two or more options, such as “Do you mean that you would like to hear more about the general statistical methods which I used, or about the specific statistical software that I worked with?” This shows that you have understood the general theme of what the examiners are interested in but are tailoring your answers to give them the most helpful information for them. Finally, remember that you can take your time to answer a question during the oral examination process. When an examiner asks you a question, you may well feel as if you have to respond right this very second, and start talking before you have finished thinking the question through. Resist this impulse! It's absolutely a good idea to take a deep breath, and take a few seconds to think before you start speaking. This will feel like a long time to you because of the pressure that you're under, but it won't appear so long to the examiners. 4. General presentation tips In such a high-pressure environment as an oral exam, you will naturally want to convey the scope of your knowledge, and you may be tempted to speak very fast, or talk about everything you know which might possibly be related to the question you were asked. However, going too quickly or giving too much information actually harms your performance, as the examiners will find it hard to extract the relevant information from your answers. Keep your answers to a few sentences of only the most applicable information, knowing that examiners will ask for further details if they require them. Speak in even, measured tones and make yourself slow down to ensure that everyone can follow what you're saying. If you're concerned about this, you can set up a practice exam with a friend and ask for their feedback, or even video record yourself so that you can watch back your own performance and adjust your style as required.
So you've coming up to exam season? Maybe you've already sat your written exams, and the only one left is the oral. Oral exams can be an daunting experience for students, so today we're sharing some advice on how to get through an oral exam with as little pain as possible.
The Top Jobs in Macroeconomics and Monetary Economics
Browse our macroeconomic job listings for economics opportunities 1. Work for a central bank or financial institution The most obvious role for someone who has studied macroeconomics or monetary economics is to work for a central bank or financial institution. These large, often international employers look at large-scale economic issues and employ many economists as researchers. These jobs are suited to people who can cope with sifting through large amounts of data and can deal with complex economic models. Sometimes, a degree of comfort with risk and uncertainty is required. If you like the idea of travelling or living abroad, then these organisations often have branches in many locations around the globe, and can be amenable to you moving and working from a different location. Bear in mind, though, that some of these institutions have been implicated in such scandals as the World Financial Crisis, so working for them may take some minor relocating of your ethical compass. Some examples of employers in this area are: - European Central Bank (ECB) - Bank of England - Deutsche Bundesbank - Asian Development Bank - European Investment Bank 2. Work for the government Another of the biggest employers of macroeconomists and monetary economists is the state. With your knowledge of complex economic systems and skills in data analysis and report writing, you can help with allocation of government funding and plan long-term financial issues such as pensions or healthcare. Jobs with the government tend to be stable, so you can stay in the same job for a very long time without worrying about being made unemployed or having to job hunt. These jobs also tend to come with benefits like sick pay and more vacation days. So after a year's hard slog (it will be tough, prepare yourself) you'll be able to take a few weeks off to recharge. Get ready for the Costa De Sol! However, government work is not for everyone. It can be exceedingly slow to get anything done, given the sprawling bureaucracy, which can be frustrating for those who like to move fast. This work requires you to think about the long-term and far-reaching implications of every course of action, so it's not the right role for someone who is flighty or impulsive. But if you can deal with this, then working for the state gives you the chance to put your education to the best possible use in helping people. Here at INOMICS we applaud those who opt for this path! You can look for jobs in your country's government or at a state or local level. <11an>limit:2;categories:jobs;tags:microeconomics</11an> 3. Work as a consultant If you can handle regularly being dropped into new and unfamiliar situations, then you might consider working as a consultant. This work requires you to be adaptable and to come up with creative solutions to existing problems. If that sounds like something you'd enjoy, and you don't mind the idea of moving to a new company or location regularly, then one big upside of this work is that it tends to be very well paid, and that each company you work with will bring you new challenges so you're unlikely to get bored. You could work for one of these consultancies: - Deloitte - Price Waterhouse Coopers (PWC) - Cornerstone Research 4. Work for a think tank If you like the sound of performing research and supporting policymakers, then you could work for a think tank. There are many think tanks with specialities in economics in general and macroeconomics or monetary economics in particular. Generally speaking, the work is tough, but varied, which keeps it stimulating. Similar to working for the state, while at a think tank it's motivating to know that your work is going towards bettering people's lives, at least in theory. An admirable way to spend your 9-5. Some organisations to consider include: - Economic and Social Research Institute (Dublin, Ireland) - ZEW - Leibniz Centre for European Economic Research (Mannheim, Germany) - Halle Institute for Economic Research (IWH) - Member of the Leibniz Association (Halle, Germany) - Center for Economic and Policy Research (Washington D.C., USA) - Ratio Institute (Stockholm, Sweden)
Studying macroeconomics, as many INOMICS users have done, opens doors to countless different jobs down the line. Companies are always looking for people who understand a bit about the world and how it functions, particularly when it comes to economics, remaining, as it does, one of the most revered disciplines of the age (for better or worse). If you have specialised in a particular area of economics, then you can use this information to narrow down your options to the kind of roles which will best fit your skills and interests. And there are, perforce, plenty of options available even once you have isolated your particular skillset. Here we've listed the top jobs that specialisation in macroeconomics and monetary economics will make available to you!
Low unemployment rates are associated with high levels of production and economic growth, and vice versa. High rates are associated with times of recession, and are consequently a key concern for economists and policy makers alike. Defining the unemployment rate Government departments of labor (or the equivalent in a given country) and the OECD calculate the unemployment rate based on labor force surveys. According to these surveys, a person is unemployed if he or she is of working age (i.e., aged 15 to 64), is without work, and is actively seeking employment. Similarly, a person is considered to be employed if they are aged 15 or above and worked for at least one hour in the week before taking part in the survey. Only paid work is included in the OECD definitions: there are different measures that include laborers working part-time as well. The unemployment rate u is then calculated as the number of unemployed people relative to the labor force, where the labor force is the sum of employed and unemployed people: u = (# of unemployed people / size of labor force) * 100. Anyone without employment who is not actively searching for a job is not considered unemployed. This includes full-time students who are not working, persons who take care of household or childcare duties, and other people who may be productive but are not paid for their work. Another group of people that aren’t counted as unemployed are so-called “discouraged workers”. These are workers who were previously unemployed but have stopped looking for work because they struggled to find a job and eventually stopped looking. Some countries may use other names for this group, such as “hidden unemployed”; and while most countries don’t include them in the official rate, most do track them. And, politicians or economists may advocate for changing the unemployed definition to include discouraged workers. Regardless, the existence of this group indicates that the unemployment rate – despite being an important indicator of the healthiness of the labor market – is not sufficient to fully describe the labor force. Other indicators need to be taken into account as well. The labor force participation rate, for instance, measures the size of the labor force relative to the working age population, and therefore includes students, household laborers, discouraged workers, and more. According to economic theory, there are different types of unemployment, and not all are equally worrisome. Frictional unemployment refers to people that are in between jobs or have just graduated and started looking for a job. It can never be eliminated entirely and is not usually concerning, because people that are temporarily unemployed while they transition from one job to another will not be out of work for long. Seasonal unemployment is caused by the seasonal nature of certain types of work, for instance, in the tourism or construction industries. This is considered normal as well. Cyclical unemployment is associated with the business cycle. During a recession, firms lower production and lay off workers, while during a boom, firms expand production and hire additional workers. Thus, when the economy is growing there will be fewer unemployed workers, and when contracting, there are more. This is concerning when a recession is severe or prolonged, but sometimes it just represents normal ebbing and flowing of economic activity. Structural unemployment arises when creative destruction makes certain jobs obsolete (usually from advancing technology). For example, professional scribes became obsolete after the invention of the printing press. New jobs are often created when technology advances, though; typists using printing presses and later computer keyboards gained jobs performing similar, but more efficient, functions as scribes once had. The more concerning employment issue that creative destruction causes is that retraining people who lost their jobs to take over the newly created ones can be difficult and costly, especially since they sometimes require entirely different skills. Therefore, structural unemployment often leads to people being unemployed for long periods, or dropping out of the labor force entirely as jobs for their obsolete skill set disappear. Institutional unemployment results from an absence of incentives for the unemployed to actively seek employment, among other factors. Generous benefits for the unemployed, for example, are thought to disincentivize people from searching for employment, whereas a high minimum wage may make it unattractive for firms to hire additional workers. When the economy is producing its maximum potential output, there’s still inevitably some number of unemployed workers. This is represented by the natural rate of unemployment, which is considered normal and unavoidable. The natural rate is found by adding the frictional and structural rates, and it can change over time due to structural changes. A look at some real-world context Let’s have a look at a few numbers from the European Union to get a sense of the unemployment rate in real economies. In Figure 1 we see these rates for four different European countries: Germany, Greece, France and Spain from 2005 until 2020 (Source: OECD). Figure 1: Unemployment rate in select EU countries, 2005-2023 (OECD Data) In Figure 1, Germany’s rate decreased until 2020, and starting from 2007 was always below 10%. France had a somewhat higher rate than Germany that rose steadily after the 2008-2009 financial crisis. It hovered around 10% before finally beginning to slowly decline in 2015. Spain and Greece, meanwhile, had rates which at times even exceeded 25%. This shows the dramatic effect that the financial crisis had on France, Spain and Greece in employment terms – while some countries like Germany seemed to fare much better. This overview of Figure 1 naturally leads to the question: what is a “good” or “healthy” rate of unemployment? Various sources usually state that a healthy rate is somewhere between 3% to 6%, though there is no definite rule. Some economies may be healthy at higher or lower rates. And the rate is expected to fluctuate with the business cycle, even if it is considered healthy. Nevertheless, it’s a cause for concern when the amount of unemployed workers in the economy remains high for a prolonged period, as is often the case during times of major recessions or depressions. Then, it often becomes a major target of fiscal and monetary policy as the government and central bank look for ways to stimulate the economy. Further reading Okun’s law refers to the relationship between employment in an economy and output growth. The economist Arthur Okun (1928-1980) stated that there is a negative relationship between them: for every 1 percentage point increase in the unemployment rate, the output of the country will shrink by 3 percentage points, according to Okun. Studies have generally concluded that Okun’s law is directionally correct, though the exact magnitude of the effect varies considerably. Nevertheless, the idea is a sensible one. As more people work, ceteris paribus, the economy should produce more, and incomes should rise. In “Okun’s Law: Theoretical Foundations and Revised Estimates” (The Review of Economics and Statistics, 1993), MFJ Prachowny shows that the output reduction associated with an increase in the unemployment rate is less severe when taking into account the output gap. Good to know Of course, unemployment rates can be compared not just across countries but also age groups. Usually, younger and older workers tend to be unemployed the most frequently. This is because younger workers may choose to pursue further their education before (re-)entering the workforce, while older workers tend to be more affected by structural unemployment factors (as there has been more time for their skill sets to become obsolete or face lowered demand), among other factors. When facing high unemployment rates, policy makers have to decide which public policies and measures are most suitable to the specific characteristics of the unemployed groups in their region. To this end, it’s important to look at a variety of demographic characteristics such as education, gender, age, and so on, as this can help inform which policy measures would be the most effective. Policies that aim to increase employment for youth will differ from measures targeted at increasing employment for seniors.
Being unemployed means that a person is seeking employment, but does not have a job. The unemployment rate is the proportion of the labor force that is unemployed and is a key macroeconomic metric that helps describe the health of an economy.
How Has the COVID-19 Coronavirus Pandemic Affected the Academic Sector?
But the coronavirus has also affected economic sectors differently. How the pandemic hit the private and academic sectors, for example, has been highlighted by the ongoing INOMICS Salary Survey. The full results will be released in early 2020; however, we can already begin analysing which sectors were most affected. A difference of extent Every sector has been affected in some way, whether that means people having had their hours reduced or having lost their jobs completely. For our study, we designate someone as being affected if they either lost their job, their salary or hours were reduced, a contract was not extended or planned promotion was delayed or cancelled. This doesn’t include workers who have moved to remote working but maintained the same contract. However, the private sector has been hit harder than the public. Nearly half of those working in the private sector - 47% - have had their jobs affected by the pandemic, in comparison with precisely one-third of the public sector. But it’s the academic sector which came out the best according to our survey: only 28% of those working in academia reported having had their hours reduced or having lost their jobs as a result of COVID. Specifically, just 3% of those working in academia have been made redundant. 8% have had their hours reduced, and another 8% have had their salaries reduced. This shows that the academic sector is more resilient to the pandemic than both the public and private. Perhaps this is because many teachers have had to continue teaching even if classes moved online. The Anecdotal Evidence Still, the academic sector has experienced other problems. One of our respondents wrote My promotion is postponed because my research has stalled, I cannot go for visiting research stays in universities and research institutes locally and internationally. And without research, my work has been made redundant as I now do mostly teaching, lecturing and administrative work online from home. Some in the sector also noticed inconsistencies with how the problem was being dealt with. For example, PhD students, who are required to do extensive amounts of research, were often not able to travel or even use libraries. While a pause may be frustrating but isn’t necessarily a huge problem, some were given extensions to finish their research which weren’t long enough. One student wrote that they were unable to conduct research on their dissertation for six months, but were only given a two month extension to their deadline. Others who are more involved in teaching were able to carry on, as many seminars and lectures began to be held online. This meant the majority of these people were able to carry on working, albeit under vastly different circumstances to which they were forced to adapt. Not out of the woods The pandemic is still very much ongoing, with second lockdowns coming into force in many parts of the world. Although there is talk of a vaccine and governments ostensibly know how to handle the crisis better, the struggles of those working in the academic sector are far from over. Many will remain unable to do their research or lose funding, and more may lose their positions or be forced to work fewer hours if the pandemic doesn’t ease up. Only time will tell. Complete Economics Salary Survey
Although we’ve been told time and again that the pandemic doesn’t care about who you are, in reality it hasn’t affected everyone equally. Senior Editor William Pearse has already written about how COVID-19 has been harder on those from ethnic minorities and on poorer communities in the UK.
How has the Economics Job Market Been Affected by the Coronavirus? - Salary Report Introduction
INOMICS is in a unique position to survey a broad and engaged subset of economists from a wide range of countries and at a wide variety of career stages. Based on this data, while recognising the limitations of a restricted sample, we are able to make key observations about the overall and regional state of economist salaries, about the extent of gender diversity at different career stages, and about the value of different levels of education in terms of salary later achieved. Over 1,500 economists completed the survey so far, with data collection continuing until the end of December 2020. INOMICS will release the full results of our salary survey in the first half of 2021 as a standalone report. This report will also be slightly different to those we’ve done in the past, in that we also included a section where economists could recount their anecdotal experience of the pandemic. This adds a personal touch to the report. While we work on finalising the results of the overall salary report, in the coming weeks we will discuss some of our preliminary findings from the coronavirus section. This will include commentaries on the geographical discrepancies we found in the severity of the crisis and if and how pre-existing inequalities in the economics job market have been accentuated as a result of the pandemic. Key findings of the salary survey related to the pandemic include: One third of economist jobs have been negatively affected by the Coronavirus Pandemic. This includes being made redundant, having hours or salary reduced, a contract not extended and a scheduled promotion cancelled or delayed. This does not include changes in how people work such as working or teaching from home. 6% of economists said they have lost their job because of the pandemic. Economists in the private sector have been hit harder than those in the public sector or academia. Economists in the Global South have been more affected than those in the Global North. 62% of economists in Africa and 56% in South Asia reported being negatively affected by the pandemic professionally, compared with just 23% in North America, and only 16% in Western Europe. Over half of economists (55%) feel they have not received sufficient support and training for remote working or moving to digital tools. There is a clear trend towards remote working and significant shifts for economists in work/life balance. Fortunately, the majority of economists have been able to maintain their employment in some form. Despite current difficulties, the picture is not universally bleak. Although they have had to adapt to digital working and home office, the majority of economists in the Global North at least have broadly been able to continue with their professional lives. New jobs are still being posted to INOMICS all the time and with the prospect of some form of vaccination program in 2021 there is at least the potential for a recovery in the foreseeable future. Complete Economics Salary Survey If you are an economist and have not done so already, be sure to complete the salary survey - submissions until the end of December 2020 will be counted towards the report, with any later submissions being used for next year’s survey. Additionally, don’t forget to create an account on INOMICS to receive notifications about all our upcoming publications as well as tailored job, program and conference announcements straight to your inbox.
In 2020, INOMICS once again carried out its salary survey, examining the state and health of the economics profession worldwide. As in previous years, the survey considered pay, sector, seniority, location, gender and educational background. Our 2020 survey was launched in the spring as cases of coronavirus began to increase exponentially around the world. Consequently, we added new questions related to the coronavirus pandemic to assess the effect of the crisis on economists and economics students.
Who is Responsible for a Shipping Vessel? Ownership and Scrapping
There must be a link between the state on whose behalf the vessel is sailing and the vessel's flag state. But in reality, flag registers, which do not stipulate the registration of shipping companies, benefit from convenient financial benefits and lower taxes. All this is partly regulated by private companies, 'helping' shipowners to change their flag to a more advantageous one when they want to. It also helps shipowners to obtain lower taxes and lighter regulatory burdens. According to UNCTAD data, almost 73% of the world's fleet sail under flags of the states other than the actual owner of the ship. This is why there is a great deal of dissonance between the countries where the real shipowners are located and the flag states exercising regulatory control over the international fleet. Check out our job listings The choice of the flag state where the ship makes her last voyage to be scrapped calls for special attention. In most cases, vessels sail to the beaches of South Asia instead of ship recycling facilities elsewhere. No wonder many end-of-life ships are already wearing the flags of Asian countries. In addition, most of these flags are already blacklisted in the Paris Memorandum of Understanding (MOU). These flags also usually indicate poor compliance with international maritime standards. Several of South Asia's beaches offer a 'last voyage' package, which includes quick registration and no nationality requirements to be met. Who benefits? If a ship had to be recycled in European ports in compliance with all the required environmental and toll requirements, it would be quite expensive and disadvantageous for many private companies. According to the data published by the NGO Shipbreaking Platform in 2019, 674 ocean-going vessels and offshore units were sold for scrap metal. Of these ships, 469 large tankers, bunkers, floating platforms, cargo and passenger ships were dismantled. They are mainly delivered to three coast lines: Bangladesh, India and Pakistan, accounting for almost 90% of the total gross dismantled worldwide. The platform's data show that in 2018, 744 large ocean-going vessels were sold to scrap yards, of which 518 were dismantled. In 2017, 835 large ocean-going vessels were scrapped, of which 543 were cracked on the beaches of Bangladesh, India and Pakistan. Statistics for the last three years show that overall figures are declining for both scrapped and cracked vessels. Bangladesh still has a favourable landfill for end-of-life ships full of toxic substances, and profit is the only decisive factor for most shipowners who sell their ships for scrapping. For developing countries at risk of poverty, these transactions are profitable. Many countries in the world that own large merchant vessels would have to pay a lot of money for scrapping, as they would have to comply with international environmental pollution requirements and other conditions. In developing countries, though, these ships are dismantled on local beaches without complying with environmental pollution regulations or worker safety requirements. Every year these ship breaking centres employ workers without specific knowledge, equipment and safety standards, even children. Local authorities turn a blind eye to the number of people injured and killed each year who work in ship-breaking yards. Old shipowners do not have to worry about this and do not have to comply with strict international agreements. Last year, at least 30 workers were killed and even more seriously injured in ship breaking work. These ship-recycling facilities claim that the work there is safe, but they are not included in the list of EU approved ship-recycling facilities. International regulations that seek to improve ship recycling practices should fall outside the jurisdiction of the flag state. A lack of political will at international level has so far prevented shipowners from being held liable for ship recycling, but the solution must be global. Policymakers should take effective measures to redirect ships to places approved by the EU. The fact that old ships are registered under flags that are known to have poor implementation of international maritime law raises serious doubts about the effectiveness of such legislation, which is based solely on the jurisdiction of the flag state. However, it should be borne in mind that the EU Ship Recycling Regulation has been applicable since 1 January 2019 and requires EU-flagged vessels to be recycled in one of the currently approved facilities in the world, included in the EU list. There are 41 such facilities on the list. These facilities meet high standards of environmental protection and worker safety, ensuring sustainability for ship breaking yards.
The United Nations Convention on the Law of the Sea (UNCLOS) stipulates that the primary responsibility for vessels lies with the flag state of the vessel. Consequently, this means that each merchant vessel must be registered under the flag of a specific state. The flag state of the vessel is responsible for the inspection of the vessel and compliance with safety, pollution prevention, crew certification and international standards.
5 Books You Should Read Before a Conference
But a good way to contend with this is to be well-read. There are some specific books you can pick up which can help you specifically with speaking publicly and networking. Read on for our list of aforementioned books. INOMICS and our parent company 11 Academia Networks are Amazon Associates, meaning we are a part of their affiliate program. This article contains affiliate links, which means we may earn money through any qualifying purchases made after you click through. However, this is not a sponsored post. 1. Confessions of a Public Speaker - Scott Berkun This funny, light-hearted book is nonetheless full of solid practical advice for successful public speaking and general communication skills. If you're giving a talk at a conference for the first time, or even if you're experienced but you want to brush up on your skills, this book by a professional public speaker can help. With advice that goes beyond giving a successful presentation and into topics like how to deal with a tough audience, combating nerves, and how to be engaging rather than boring, this will help make your talks better and give you confidence. These tips will also help you during smaller speaking events, such as if you're giving a poster presentation at the conference. 2. Never Eat Alone And Other Secrets to Success, One Relationship at a Time - Keith Ferrazzi Although this book is aimed at business professionals, it is packed full of advice on networking which will be helpful for academics too. Networking is one of the biggest advantages of conferences, and yet it is something that many academics struggle with and even feel embarrassed about. This book encourages you to build your network by creating connections with others with whom you have interests and work in common, rather than trying to network with absolutely everyone. This targeted advice can make networking at a conference more fun and less alien. 3. English for Academic Correspondence and Socializing - Adrian Wallwork If you're a non-native English speaker and you're attending an English language conference, then striking up conversations with the other attendees can be even more intimidating. This book is aimed at academics who are non-native English speakers and has advice on written English, such as writing and responding to reviews or sending emails. The sections which will be most useful for conferences are the chapters on interacting with native English speakers and on socializing. These sections cover all the aspects of English which you weren't taught at school, like how English is used colloquially, and typical social interactions and small talk. These can help you to ease into conversations at conferences and to get acquainted with your conversational partner before you start discussing your academic work. 4. The Charisma Myth: Master the Art of Personal Magnetism - Olivia Fox Cabane We all know those people who simply attract people, who become the lightbulb for the moths as soon as they walk into a room. Most people think this is a talent that people are born with, a gift, simply the way some people are. Introverts will remain introverts; the charismatic will always command the attention of the room. Olivia Fox Cabane is here to break down these preconceptions, and show and teach everyone that no matter who you were before, you can train yourself to become more charismatic. Charisma can help you in many situations - finding a job, being a leader, improving your relationships - but it's also an essential component of networking and can be an invaluable asset at a conference. Cabane shows how charisma can be sliced up into various categories and components and shows how anyone can learn them. She says it isn't about changing who you are, or about totally altering your personality: it's simply about learning a series of practices that will help you attain more attention and simply be more charismatic. 5. Superconnector: Stop Networking and Start Building Business Relationships that Matter - Scott Gerber, Ryan Paugh Scott Gerber and Ryan Paugh want you to stop networking. Their book breaks own the problems of the old networking procedures - networking for networking's sake - and instead contend that a more community-based approach is more effective. They talk of Suerconnectors, who understand how important it is to build valuable relationships with people, can solve problems effectively, and bring together different communities that can help each other. Gerber and Paugh will tell you what you need to do in order to become one of these lauded Superconnectors. They show how some of the best networkers in the game maximise the value of each of the communities they manage, and show that the best way to receive things that are valuable to you is by putting the needs of others first and waiting for the good karma to flow right back to you. They'll also show you how to be selective with whom you network, meaning you can focus on finding, building and maintaining the most important relationships to you. What else should I read? The latest book written by the keynote speaker There are a few good reasons that you should read the latest book that has been authored by the conference's keynote speaker. Firstly, reading the material beforehand will help you to understand the keynote speech and give you the chance to think of some questions which you might like to ask the speaker. Secondly, the work of the keynote speaker often sets the tone for the conference, guiding what the main topics to be discussed will be, so having read their latest book in advance lets you predict what kind of topics will be hot at the conference. Finally, it's a book that other attendees are also likely to have read, so you can strike up conversation by asking other people's opinion about it. Newspapers, magazines & journals in your field Finally, one of the best way that you can have rewarding conversations at conferences is to read broadly about current events in your field and in the world generally. You don't need to become an expert on every topic, but pick up a couple of issues of the top journals in your field, a few general magazines like New Scientist or The Economist, and a newspaper which you can flip through as you travel to the conference. Having a basic knowledge of the state of your field will make it much easier for you to converse with people who do work outside of your sub-field. Also, consider reading up a little bit about the history, culture, or current events of the location where the conference is being held. Being able to chat about the history of the area you're in or recommend some places to visit there will help you to talk casually with other attendees. Everything and anything As is now received wisdom, it's good practice to simply read everything you can get your hands on. Reading everything you can will increase your vocabulary, improve your articulation, and make you a better writer, all excellent skills to have in business and academia. Whether this be classic literature, genre fiction, non-fiction, academic papers, even comic books and newspaper articles (the sports sections are often particularly fluid), pick up everything and read, read, read.
Networking is one of the most important parts of a conference, but lots of people find it hard to engage with other people. At conferences it's even more difficult: you're talking with so many people, many of whom are successful businesspeople or established academics.
The Benefits of an Economics Background for an Engineer
Browse our programs listings for more opportunities Mixing subjects I was advised that economics was the most applicable choice for starting to understand certain concepts within business. Indeed, I was able to learn concepts in both micro and macroeconomic theory, as well as to complete courses within the more strictly business-related commerce program. One of the benefits of an engineer learning economics is the connection to mathematics. Engineering students complete a wide range of math and statistics courses during their studies, so most (if not all) math-oriented economic concepts were easier to grasp when introduced. The best of both worlds While the overlap in material between the two programs proved to be of clear and significant benefit in terms of the workload, the diversity provided both the greatest challenge and the greatest reward. For example, in my final year of study, I had to complete a real-life, multidisciplinary design project for my engineering degree. In the same time-frame, I was also involved in several in-class discussions about current economic trends. This contrast made me think from multiple perspectives, broadening my understanding of what economic and financial factors should be considered in engineering projects and vice-versa. It is this standpoint where an early leg-up in economic concepts is fundamental for an engineer, not only in order to have a management perspective, but also to develop a business perspective: technical knowledge is key, but an ability to consider the current and forecasted market trends may be just as important when completing more complex projects over longer periods of time. For example, in my current field of Aerospace Engineering, predicting the economic trends over the next 10, 25 and 50 years of anticipated technological advancements is a fundamental requirement for all companies in the field. In hindsight As I look back, I fully recommend any engineering students wishing to study for an MBA or simply advance their business understanding to enroll in an economics program. Though I still require an MBA and a considerable amount of work experience before considering a position in management, I feel that by gaining an economics background I have a better understanding of the current challenges at hand, and how the market and financial side of any project may be just as important as the technical requirements.
Ever since I was a kid, I dreamed of becoming an engineer. From playing with LEGO to being an active member of my high-school robotics team, I loved building things and breaking them down to learn how they worked. This being said, I have kept an open mind about a position in management down the road and from this perspective it was important to me to prepare for a career in both business and engineering. My answer: a dual degree program whereby I completed a BA in economics alongside a BSc in Mechanical Engineering.
We are all constantly facing tradeoffs in decisions we must make. For example, we’re considering tradeoffs when choosing between purchasing a new mobile phone or saving the money to pay for the next holiday. Or when deciding between staying up longer for drinks with friends or going home to rest before an exam. All of these situations are similar: no matter which decision we finally make, it will bring us closer to reaching one goal. But at the same time, it will make reaching another, competing goal harder. Let’s consider the first situation mentioned above to think about the tradeoff between saving and spending money. The tradeoff is the following: if you decide to buy the new phone, you will have to use some of your savings that were reserved for your holiday. If you choose to save the money for the trip, you will have to use your old mobile phone. Clearly, no matter what you decide, you will come closer to one goal (having a new phone or going on a special vacation). But at the same time it will become harder for you to reach the other goal. It’s important to note that these goals must be competing to truly be considered tradeoffs. In this case, since both goals cost money, using your money to reach one of the goals makes it more difficult to reach the other goal because both draw from the same resource. Scarce resources like time and money tend to be the limiting factors for many decisions involving tradeoffs. However, some decisions would not truly be considered tradeoffs. For example, suppose you decide to go to the park in the morning and watch a movie in the evening. There was not a tradeoff considered when reaching that decision, because neither event competed with the other for time, and both were free so they did not cost money. Instead, a tradeoff would be present if you considered going out to eat with friends instead of watching the movie. Tradeoffs in the economy Political decision-makers also face tradeoffs with decisions involving different economic policies. One central tradeoff in economics is the one between efficiency and equality (or equity). Economists overall tend to agree that the market does a pretty good job in assigning scarce resources efficiently, but less so when considerations of justice or fairness are taken into account as well. Therefore, redistribution plays a central role in most countries and taxes are a key instrument to reach redistributional goals. So, let's think about the tradeoff between efficiency and equity (or equality) when designing a tax system. Most countries have a progressive income tax which means that people with higher incomes pay higher taxes. Policymakers, economists and the general public agree generally that the country’s tax system should be progressive to some extent. However, there is a lot of debate concerning the exact income thresholds for each tax rate and how high the different tax rates should be. Some fear that excessively high tax rates for high incomes will harm the incentives of high-income earners to work and innovate. This stems from the idea that people are motivated by incentives and only work hard if they expect higher economic profit from their increased effort. Therefore, efficiency would call for more moderate tax rates also on high incomes. At the same time, taxes are an important instrument of redistribution as tax money is used to finance public infrastructure and other goods and services. Hence, there exists a tradeoff between economic efficiency and social welfare. Other notable 'tradeoffs' economists consider are the increase in budget deficit that comes from increasing government spending to stimulate investment, and the disincentive to work that comes from raising unemployment benefits. Consequently, one of the main tasks of economists is to provide empirical evidence and theoretical models that analyze and quantify these tradeoffs and thereby help decision-makers to reach (evidence-based) decisions that improve welfare. In economic theory, tradeoffs are measured using the concept of opportunity costs. Opportunity costs measure the costs of the best foregone alternative, i.e., it measures what we sacrifice in order to get something. You see that the concepts of tradeoffs and opportunity costs are closely related. The first describes the general problem of facing incompatible goals, while the second quantifies the costs of choosing one objective over another. Further reading In 1974 Arthur Okun’s book “Equality and efficiency – the big tradeoff” was published. In this book the famous macroeconomist, who is better known for Okun’s Law, writes about the great tradeoff between equality and efficiency. On the one hand, the capitalist system encourages people to economically do better than other members of the society. On the other hand, social norms and values emphasize the importance of social equality and consideration of others who may be less fortunate. This contradictory message asks for an egalitarian social system while at the same time fostering increased inequalities in economic well being. In an empirical investigation published roughly at the same time as Okun’s book, Browning and Johnson assess the social costs of redistributional measures (“The trade-off between equality and efficiency”, Journal of Political Economy, 1976). The authors estimate the marginal cost of reducing income inequality and find that this cost is quite high. Depending on the modeling framework they estimate that the disposable income of upper-income quintiles decreases by $3.49 - 9.51 for each dollar increase in the disposable income of lower- income quintiles. Good to know The English proverb “you can’t have your cake and eat it too” summarizes the concept of a tradeoff. Keeping the cake and eating it are two incompatible goals. In other words, we simply cannot have it all.
A tradeoff refers to a situation where in order to come closer to reaching one objective, you must sacrifice another. In other words, when people or societies are facing a tradeoff, two or more goals are at odds and cannot be satisfied simultaneously. Any progress towards one of the goals is (at least partially) offset by a deterioration of the prospects of reaching another goal.