You can read more about David Reynold’s model here and here. In 2013 Barry King tried to beat Reynold’s record by constructing a model of Salisbury Cathedral (which is a popular tourist destination for KGB agents). You can read more here.
Here’s an example of how Starbucks creates value for me:
This concept is closely related to “Jobs to be done”, but here’s my review of ‘Competing Against Luck‘. Here’s my bleaker application of value to Apple’s iPhone innovation:
For a more traditional, textbook treatment for demand curves, see here:
A great application of consumer surplus is here:
Can you think of something that delivers a lot of consumer surplus for you? What’s the most consumer surplus you’ve ever received?
The training scene from Rocky IV demonstrates the difference between the USSR (technologically sophisticated but lacking in heart) and the US (backward but free).
What should Widodo do? Indonesia is a large, populous middle-income country. It faces no major near-term security threats. It has a small manufacturing base and no major non-commodity export sectors. What is the best non-bureaucratic 10 page economic development briefing document and set of prescriptions that one could write for Indonesia’s president?
Here’s my analysis of Belarus, using many complementary concepts.
Learning Objectives: Understand the causes of a sovereign debt crisis. Understand the role international agencies play in managing a debt crisis.
Although I use Chapter 3 as the pre reading for this class, I highly recommend the full book: “And the Money Kept Rolling In”. Here’s The Economist’s summary.
Case: Blustein, P., “And the Money Kept Rolling In” Public Affairs, 2005 (pp.39-60)
Discussion question: As of July 1998 should the IMF suspend their program in Argentina, or continue their support?
These resources form part of my Managerial Economics course map. You can watch the full YouTube playlist here. This page ties into Chapter 8 (Section 8.3) and Chapter 10 of ‘Economics: A Complete Guide for Business‘.
Learning Objectives: Apply a range of examples of behavioural anomalies to real business situations. Understand behavioural anomalies in light of an ecologically rational framework.
Here is an explanation of the Birthday Paradox. Notice that the probability calculation assumes a uniform distribution (i.e. that there’s a 1/365 chance of being born on any given day). In fact, birthdays in July, August and September are more common than other months.
The incredible data visualisation used at the beginning of my lecture is from Gapminder. I strongly encourage you to visit their website and play around with the tools. In particular, try to create a chart showing GDP per capita against infant mortality and then see how the data has changed over time.
The increases in global income have been incredible. In Factfulness, Hans Rosling tells us that 100,000 years ago everyone was poor and most children didn’t survive long enough to become parents. 200 years ago, 85% of the world were still in extreme poverty. Today, most people live in middle-income countries, with living standards similar to Western Europe and North America in the 1950s. (p.38).
Reduced population growth (poor communities have lots of children because many will die early, and they need a contribution to family income. As they get richer, the need for more extra children declines and parents focus on quality not quantity… based on current growth projections total global population is due to stabilise at ~11 bn people. As Rosling says, “Once parents see children survive, once the children are no longer needed for child labour, and once the women are educated and have information about and access to contraceptives, across cultures and religion both the men and the women instead start dreaming of having fewer, well-educated children” (p.91)
Greater concern for the environment
More resources for humanitarian assistance (e.g. for natural disasters or global pandemics)
In the lecture I argue that infant mortality figures are better proxies for living standards than life expectancy. As Hans Rosling argues, “this measure takes the temperature of the whole society” (p.20). This is because children are fragile, and you therefore require lots of good circumstances in order for children to routinely survive – it tells us about access to basic health care, the literacy of mothers, etc.
The lecture tried to show the link between economic growth and rising living standards for the general public. This is something that Dracula noticed when he encountered a “normal” modern house:
I’ve been a nobleman for 400 years. I’ve lived in castles and palaces among the richest people of any age. Never….never! Have I stood in greater luxury than surrounds me now. This is a chamber of marvels. There isn’t a king, or queen or emperor that I have ever known or eaten who would step into this room and ever agree to leave it again. I knew the future would bring wonders. I did not know it would make them ordinary.
Some great videos to watch that explore the themes from the lecture:
I provided some pessimistic views on transformative breakthroughs. But every now and then I notice the power of steady, incremental progress. For example:
