Tag Archives: Economics

What is the elephant chart?

Thought-provoking. I first read about the “elephant chart” in Edward Luce’s The Retreat of Western Liberalism (affiliate link), where the author explained how income inequality was a key factor in the global rise of protectionism and angry populism. Surprisingly, the middle class of rich OECD countries were the one who felt disenfranchised, left behind, and generally unloved.… Read More »

Uber is uber

Uber the taxi-technology company started in 2009 as a novelty for its co-founders and friends. Now it has a market valuation of $51 billion, has 1M active drivers, and operates in 330 cities. Read a Fast Company article here which is focused on the founder – Travis Kalanick – and what an intense, contrarian grinder his is. Major drive, early start-up… Read More »

Sunk cost: Google cuts orkut

Sunk cost is a simple economic concept that we ignore. The idea that “resources already spent cannot be recovered” seems simple. You cannot “un-spend” money or time. We intuitively know this and yet, we constantly don’t follow our own advice. 10 years ago, Google started Orkut, ostensibly the first social network before facebook. According to wikipedia it was founded… Read More »

Opportunity cost: no decision is free

Opportunity cost = what if?  I first learned about opportunity cost in college. It was a radical idea for me at the time, and frankly, clients and consultants probably don’t think about it enough. The idea is simple, but powerful; resources you plan to spend (whether time or money) can be spent on other things. It asks… Read More »

Why did Detroit go bankrupt?

Detroit’s bankruptcy is sad for 2 reasons. It shows the decline of one of America’s great manufacturing cities, and also augurs what will likely happen to many more US cities, counties, and states in the future. Governments are bankrupt everywhere. Without sounding too libertarian, they over-promise and are inefficient. The Washington Examiner put together a list… Read More »

GDP: Americans (over) consume, Chinese (over) invest

GDP = C+I+G+NX.  Sadly, that is the only formula I remember from my undergraduate macroeconomics class, but thankfully, it is the most important one. The Gross Domestic Product  = Consumption + Investment + Government + Net Exports (Export-Imports).  It’s worth remembering, even if you don’t work at the World Bank or teach economics. USA =… Read More »

BCG report: Ending the Era of Ponzi Finance

Not sure how this happens, but the entire developed world is in debt. Europe, the US, and Japan have borrowed so much money that they are headed towards ruin. The Boston Consulting Group even went so far as to call it the biggest Ponzi finance scheme in history. That is some pretty bold talk from… Read More »

How big is the Chinese economy?

These graphs from the Economist describe China’s economy, growth and influence. China certainly has issues (e.g., demographic imbalance, rich-poor disparity, censorship) but you have to admit, China has been putting up some incredible economic numbers. Chinese economy is HUGE. 1) Currently, the Chinese and US economy are approximately the 12-13% of the of global economy… Read More »