Monday, 29 October 2012

Pooponomics - the human waste industry

There is an old euphemism telling about a place which 'even the king visits on foot'. And while it's certainly not an usual topic of dinner conversations, waste disposal has a bigger economic impact on our lives than most of us would think. The following infographic tells virtually everything about the topic one could imagine - should you still dare to ask, you're free to go ahead.

Readers note: I'll be on a family holiday starting Monday until Friday, without a connection to the Internet. Due to this, Schoolonomic will temporarily stop posting until then - do not worry, we'll be back.

Pooponomics: The Economy of Human Waste

Friday, 26 October 2012

Did the West abandon Hungary in 1956? - Part II.

In our previous post, we have written about the origins of two simultaneous Cold War crises - they happened on opposing sides of the Iron Curtain, for different reasons, yet their simultaneity had profound consequences for both events. This post will explore the effects the Suez Crisis had  on the Hungarian Revolution and vice versa.

Wednesday, 24 October 2012

Economist of The Week - Carl Menger

The late 19th century saw the emergence of modern economics in general, regarding not only the tools and principles of quantitative measurement, but regarding modern macroeconomic schools of thought as well. The earliest of these, the Austrian School of Economics was founded by the economist Carl Menger, and it has a devoted group of proponents to this day.

Source: Wikimedia

Tuesday, 23 October 2012

Did the West abandon Hungary in 1956? - Part I.

Exactly 56 years ago, a series of protests by Hungarian university students turned into what became the first example of a popular uprising against an oppressive Soviet regime, and a key moment in modern Hungarian history - the Revolution of 1956. While the revolution is commemorated each year, it is often forgotten that it's success largely depended on foreign politics - not unlike the revolutions of 1848 and 1703. This two-post-long series will explain the origins and implications of the Suez Crisis on the Hungarian cause - and in the second post, will try to determine whether there was a realistic chance of foreign assistance for the revolutionaries.

Monday, 22 October 2012

Are there advantages of Somali piracy?

When we think of piracy, many of us imagine long-bearded, English or Spanish-speaking buccaneers sailing in the waters of the Caribbean, pillaging ships of all insignia sometime during the early 18th century. But lately, the term piracy has been attributed to another group of seafarers - the former fishermen of Somalia. Exploring their socio-economic backgrounds and history, this post aims to explore the economic effects of their activities.


Thursday, 18 October 2012

Hungarian pension disparities

Pensions and government benefits for senior citizens are both a big and controversial component of state expenditures all around the developed countries - Hungary is no exception. Government expenditures on pensions made up 10.1% in 2002 - roughly the same amount as in other European countries, but the ratio of pensioners to the active workforce is very high. This article deals with the question of economic sustainability, political gridlock and pension disparities.


Wednesday, 17 October 2012

On inequality and the Gini coefficient

This week's edition of The Economist (October 13th-19th 2012) deals excessively with the problems caused by inequality. Empirical evidence shows that higher inequality correlates with higher political instability and reduced investment rates, the mentioned study being just one of the many. And while inequality seems hardly measurable, it's actually quite easy, thanks to two scientists - economist Max O.Lorenz and statistician Corrado Gini. This post will firstly tell about the Gini coefficient, a common measure of inequality, and secondly list intriguing phenomena regarding it's use.


Tuesday, 16 October 2012

Economist of The Week - Wilhelm Roscher

Throughout the 300-year old history of modern economic thought, various schools of thought have risen and fallen out of favour as new ideas and theories took their place. And while some of these approaches have been holding sway since the end of the 19th century, there is one school in particular, which, albeit fell out of favour by now, have once held an enormous sway on both European and American economics. The school's name is the German Historical School of Economics, and this article discusses the life of it's founder, Wilhelm Roscher.

Source: Wikimedia

Monday, 15 October 2012

And this year's Nobel Prize goes to...

Alvin E. Roth of Harvard University and Lloyd Shapley of the UCLA. But what did these scholars accomplish to gain this years' award? Who handles out the Nobel Prizes in Economics? And which countries provide the biggest number of laureates to the world? Read below to learn about the history, geographical distribution and other related facts.

Sunday, 14 October 2012

A Short Guide to 1920's Government Finance

In contemporary Hungary - severely affected by the financial crisis -, seeking foreign financing for government expenditures is not an easy business. With current yield rates for 10-year government bonds are around 7%, long-term market financing is not an option - yet the government is reluctant to seek help from the IMF, despite a debt to GDP rate of 74.6 percent in 2011.  Nonetheless, there have been multiple examples of the Hungarian government 'giving in to foreign pressure' - the most classical example is the one immediately after the First World War, which in the end lead to the establishment of the independent Hungarian central bank.

Népszövetségi Kölcsön [League of Nations Loan]
Source:  © IWM (Art.IWM PST 5759)

Thursday, 11 October 2012

The economics of terrorism

In this blog, we have written about the economic implications of spam e-mails, music festivals, and casinos among others - but the economic implications of terrorism are especially intriguing and controversial. The following video shows not the side of the regulators, but the terrorist themselves.Loretta Napoleoni, a long time investigator of the Italian terrorist group called the Red Brigades, presents a talk at TED about her findings.

Wednesday, 10 October 2012

Economist of The Week - Karl Marx

The name sound familiar to everyone - Karl Marx, the German scientist is arguably one of the most famous and influential economic thinkers, possibly seconding only Adam Smith. And while his ideas have generally fell out of favour by the beginning of this century, we all know how recent those developments are. This post will aim to provide an insight into the life and economic viewpoints of Marx, trying to separate these bits of information from the subsequent political and ideological effects his works have had on subsequent generations.

Source: Wikimedia

Tuesday, 9 October 2012

Does spamming make people rich?

We have all been annoyed by them - advertisements, pop-ups, spam letters, 'you-won' windows and the list goes on. And many ask: why are spam emails being spent at all? The answer would seem obvious: because they are (at least somewhat) effective as a method of marketing. But is that assumption testable, and the profits measurable? It would appear that they are - and seven computer scientists at the UCLA, Los Angeles did just that.

Source: Washington Post

Monday, 8 October 2012

7 Biggest Crashes of All Time, IV.

In the fourth post of our series on stock market crashes (the first three posts can be found here(about 1907), here(about 1929), and here(about 1987)), we present a unique one - firstly, because this particular crash originated and stayed in Japan, instead of the USA, and secondly, because it wasn't a traditional crash at all, but more of a gradual collapse. Nonetheless, it's effects had probably the most severe consequences in modern financial history. Intrigued? Then scroll below to read about the Japanese asset price bubble, bursting in 1990.


The Lost Decade
Date: Starting in March 1990
Location: Japan
Causes: burst of the 1980's asset price bubble
Duration of panic: N/A
Biggest percentage change of market index: -63.2% until August 1992 (Nikkei 225)
Length of recession: 13 years
Results: A decade of deflation and economic mismanagement called the Lost Decade, followed by stagnation/slow growth

Sunday, 7 October 2012

The power of the informal economy

The motor of supply and demand is a powerful and insuperable one. If a demand exists for a certain product or service, sooner or later someone will be there to provide supply - even when when doing so is illegal, eg. the Mafia alcohol trade during the Prohibition.This creates a huge market for goods and services worldwide - the so-called informal economy, which employs 1.8 billion (!) people worldwide. The following presentation held by American journalist, who investigated such enterprises for four years, provides an intriguing glimpse into the world of this shadow economy.

Saturday, 6 October 2012

History of the USA paper currency

As we have shown in our posts on monetary policy, the creation of paper money - and later, pure fiat money, money which derives it's value only from a governmental guarantee - was a lenghty and often chaotic process. This was especially the case in the United States of America, where the lack of a federal central bank made issuing a strong local currency difficult at best. The following infographic tells the intriguing history of the United States dollar, going back more than 200 years.

Click on the image to enlarge.

Thursday, 4 October 2012

Economic School of The Week - Classical Economics

Our regular readers may have noticed that this Wednesday we wrote about student finances rather than one of the regular Economist of The Week posts. This was no coincidence - today's post is while being an integral part of the series, aims to conclude and summarise the first major era of the economic sciences, classical economics. 

Note: Click on the names of the economists to read about them in further detail.

Source: Wikimedia

Wednesday, 3 October 2012

University accomodation costs in UK

October 15th - the deadline for an application for a Oxford or Cambridge degree in the United Kingdom - is steadily approaching. Many students - among them myself - are interested in studying abroad, yet to many this poses severe financial problems. While tuition fees are stable and calculable, costs of accomodation can vary a great degree and this makes the calculation the total abroad costs uncertain at best. However, the following infographic may shred some light on the issue, and make deciding between universities easier.

The True Cost of Going to University

Tuesday, 2 October 2012

The mysterious pricing of Bordeaux wines

Ever since the founding of the first commodity exchange in Amsterdam in 1602, there has been an interest at one time or another in everything tradeable - ranging from tulips to grain, and to quality Bordeaux red wines. Hundreds of professionals specialise in the trade, distribution and pricing of these delicacies - yet for a long time, most of their price predictions, based on intuition and tasting, fell short of subsequent results. To this point, this seems like a standard case of price unpredictability - but recently, the research of Orley Ashenfelter, an economist at Princeton has shown that wine prices CAN be predicted. Flabbergasted? Read below, and we will tell you how.

The seemingly unpredictable price of Bordeaux red wine actually is mainly influenced by the weather.
Source: Daily Telegraph

Monday, 1 October 2012

The Euro Crisis Explained, III. - How it all began

In the first post of our series on the Euro Crisis, we have argued that the growth of the financial crisis into a bigger, governmental debt crisis was triggered by two factors - the one being the ECB's 'failure' to act as a lender of last resort to countries in trouble, while the other being the formulation and bust of the European housing bubble. Today's post aims to explain the first factor - but to understand the totality of the causes which lead here, we have to go back to the founding of the European Union. Join us in our travel back in time below.

Source: Europejski Portal