How to describe an industry

Recently I caught myself describing an industry in the old fashioned way. I focussed on the number of people employed in the industry, its contribution to GDP, and, in order to typify the market structure, I tried to find the most up to date information on market shares and company size.
But then it hit me: I was doing what I have always done, whereas we now need a different perspective on industries: a doughnut perspective.

The Concept of Value

One of the things we have discussed over the last few months is the concept of value. The question ‘what is value’ is such a philosophical question. It is often assumed that economists believe price to be equal to value, but if that was so, why would we have the concept of willingness to pay?

Do We Need Pandas?

Today a shorter post than I normally write. This is due to my work on a series of posts on a specific industry, which I want to kick off with a post on how to describe an industry. I am not satisfied with the result yet, so you have to wait a little longer for that post. There has been a book I wanted to write about for quite some time now, so I use this opportunity to do just that.

Allocation Systems

Alternative allocation has always been a fascinating concept to me. The insight that resources can be allocated in different ways is central to the fundamental theme of economics: choice. I used to think that economic choice was equivalent to the concept of economic scarcity. However, discussing allocation systems made me realise that this may not be that obvious.

Normative Framework

A few days ago it was pointed out to us that the doughnut was not a model but a normative framework. Since we believe it is extremely important to teach young people the difference between normative and positive statements, this is an important insight. Therefore, it will not surprise you that we are very much aware of this. This is actually the reason why we prefer to say a 21st century economics education should be based on the doughnut framework.

Exchange over Time

In the Dutch specification of the subject of economics, we have identified the concept of ‘exchange over time’. This concept is used to designate transactions where we exchange future consumption with current consumption, which is what we do when we take out a loan to buy for example consumer goods, or the other way around, which is what we do when we save up money. How can we apply this concept in a broader sense?

Equation of Exchange

Last week, the question was raised if the Equation of Exchange could be part of a 21st century economics education. Since I learned this equation when I was at school, you could ask yourself if it is not outdated. The equation, however, is of a simplicity that allows for many lessons about the economy. So, I would say: “Why not?”.

Case studies

You may have wondered why I did not include some current examples in the nitrogen cycle lesson. And if you did not wonder it then, you may have wondered why I left dead zones, acid rain, air pollution and climate change out when I discussed human interference in my previous post. Let me tackle both.