The world's funniest economics stories

Chapter 3 There are no rich people who don't understand the economy, and there are no poor people who don't understand the economy (2)
A buzzword, but inadvertently reveals the so-called gap between the poor and the rich.Rather than saying that what the poor lack most is money, it is better to say that what the poor lack most is the ability to create wealth.The various weaknesses of the poor and the social environment in which they live make the situation of the poor very difficult.

Just like many women like to go shopping, like to spend money, and like to go home with large and small bags of discounted goods, then stuff them into the cabinet, and finally dispose of them as waste products, the meaning of many poor people's consumption lies in the shopping process, and The most important value of the commodity is ignored.In this way, the poor are only interested in letting money flow out, not in letting money flow in.Precisely because many poor people have such a concept, these people can only be poor all their lives.

A piece of clothing may be affected by the influence of fashion waves, because the style is no longer fashionable and depreciates in value, and it will not be long before it is forgotten, while the purchase of profitable assets will keep the money flowing into your pocket.If owning a house allows money to flow into your pocket, it is an asset, but if money flows out of your pocket for the sake of the house, it becomes your liability.While many poor people keep repeating their dreams of winning lottery tickets, rich people are thinking about how lottery sellers operate their businesses; Rich people set up their own companies, become their own bosses, and run the companies well.

If a person focuses all his energy on how to choose numbers, how to bet, and how to win the jackpot, then this person's thinking is a typical poor person's thinking, and his chance of success is only one in ten million, almost equal to nothing.And his money can only be collected by others forever, used for others, and become the cornerstone of others' careers.

The poor do things and the rich do careers. The difference between careers and things is a thousand miles away. They are completely different in time, space and nature.

The difference in life concepts and ways of thinking has directly led to the imbalance in people's property income and resource distribution, and the rich and poor have also emerged as a result.When it comes to the gap between the poor and the rich, the first thing to understand is the Gini coefficient.Due to the high degree of attention to the gap between the rich and the poor in a country, people have invented many indicators or parameters to evaluate the gap between the rich and the poor, and the Gini coefficient is the most famous one.

The Gini coefficient, or translated into the Gini coefficient, was defined by the Italian economist Gini at the beginning of the 20th century. According to the Lorenz curve, it is an indicator for judging the fairness of income distribution. An important analytical indicator of the status, its scale value is between 0 and 1.The smaller the Gini coefficient, the more even the income distribution; the larger the Gini coefficient, the more unequal the income distribution.Usually 0.4 is used as the warning line for the gap between the rich and the poor. When it is greater than this value, social unrest is likely to occur.

The economic meaning of the Gini coefficient is: in the total income of residents, the part of the income used for uneven distribution accounts for the percentage of the total income.The maximum value of the Gini coefficient is "1" and the minimum value is "0".The former means that the income distribution among residents is absolutely unequal, that is, 100% of the income is occupied by all the people in a unit; while the latter means that the income distribution among residents is absolutely equal, that is, the income between people is completely equal, and there is no any difference.But these two situations are only absolute forms in theory, and generally do not appear in real life.Therefore, the actual value of the Gini coefficient can only be between 0-1.

At present, there are many methods and indicators used internationally to analyze and reflect the income distribution gap among residents.Since the Gini coefficient gives a quantitative boundary that reflects the degree of difference between the rich and the poor, it can objectively and intuitively reflect and monitor the gap between the rich and the poor, and forecast, warn and prevent the polarization of the rich and the poor among the residents. It has been widely recognized and adopted by countries all over the world.

The Gini coefficient, according to the regulations of the relevant organizations of the United Nations:

If it is lower than 0.2, it means the absolute average income;

0.2—0.3 means relatively average;

0.3—0.4 means relatively reasonable;

0.4-0.5 indicates a large income gap;

A value above 0.6 indicates a large income gap.

In my country, with the gradual widening of the gap between the rich and the poor, the Gini coefficient has become one of the hottest topics among people.Some people think that my country's Gini coefficient has exceeded the warning line of 0.4.Some people think that my country's situation is special, the role of the Gini coefficient is exaggerated, and the gap between the rich and the poor is not so serious.

Overall, the Gini coefficient is an indicator that reflects the fairness of income distribution and measures the gap in income distribution.

Lorenz curve, in order to study the distribution of national income among nationals, the American statistician Lorenz proposed the famous Lorenz curve in 1907.It first ranks a country's population from low to high income, and then considers the percentage of income received by any percentage of the population with the lowest income.

4. How much a house is worth - purchasing power

This is a very intriguing story, which happened in two completely different countries, China and the United States.

Ms. Zhang really wants to own a house of her own. She has entered middle age and works in an ordinary company. She is not particularly rich, but the housing price is still beyond her reach, so she follows the old method. My husband is very frugal in life. Except for the necessary expenses in life, they seldom spend money randomly. They save the rest of the money in the bank and buy funds, stocks, etc., hoping to use their frugality and hard work. , Saved the money to buy a house earlier, and fulfilled my wish.

So they started a hard life, life is very hard, but buying a house is a hope.

They were getting old and their health began to deteriorate. After a serious illness, Ms. Zhang was overwhelmed and was admitted to the hospital.Unfortunately, Ms. Zhang passed away in the end, and she did not buy the house she hoped to buy before she died.

As for another family far away in the United States, they are also in the same situation as Ms. Zhang. They also belong to the working class, and it is also difficult to buy a house.But they have different ideas from Ms. Zhang. They borrowed a sum of money from the bank and bought their own house, so the two of them lived in the house and lived happily.

This story involves the term "purchasing power". It is precisely because of the different purchasing power and consumption patterns of China and the United States that the protagonist in this story has two different results.

Purchasing power refers to the total amount of money used to purchase goods in a certain period of time.It is formed through the distribution and redistribution of total social products and national income. The social purchasing power comes from the wage income of employees in various economic sectors, the labor income of laborers in other occupations, and the financial income of residents [such as subsidies, relief , incentives, etc.], agricultural loans from banks and credit units, net increase in advance purchase deposits, other income of residents, currency used by social groups to purchase consumer goods.Purchasing power refers to the ability to purchase goods.

China's social purchasing power is mainly composed of three parts: the monetary expenditure of residents to purchase consumer goods, the purchasing power of social groups, and the monetary expenditure of farmers to purchase agricultural production materials.Another meaning refers to the quantity of goods or services that can be bought per unit of currency, that is, the purchasing power of currency.It depends on the value of the currency itself, the value of the commodity or the cost of labor.

The size of purchasing power depends on the development of social production and the distribution of national income.With the growth of social production, social purchasing power continues to increase, and changes in the relationship between accumulation and consumption in national income also have a direct impact on purchasing power.

A commodity is a product of labor produced for exchange [or used in exchange] that is useful to others or to society.The basic attributes of commodities are value and use value.Value is the essential attribute of commodities, and use value is the natural attribute of commodities.

The purchasing power of social groups refers to the funds that social groups use public funds to purchase non-productive goods in the market.

5. The money basket is stolen - Inflation
After the First World War, there was such an interesting joke among the German crowd:

A thief came to a house to steal things and saw a basket full of money.The thief picked up the basket and looked at it, then poured out the money and took the basket away.

Why did the thief take the basket instead of the money?It turned out that in Germany at that time, the currency had depreciated to an unimaginable level.Therefore, comparing the basket with money, the thief feels that the basket is more valuable.

After the First World War, Germany, whose national economy was already on the verge of collapse, had no choice but to rush to print banknotes day and night in order to repay the harsh war indemnity, hoping to raise funds for the indemnity through the issuance of a large number of currencies.The German government's helpless way triggered one of the most dramatic hyperinflation in German history.

1922年1月到1924年12月，短短两年时间，德国的货币和物价一直在以惊人的比率上升。我们可以从一张报纸的价格变化来看这种速度：每份报纸的价格从1921年1月的0.3马克上升到1922年5月的1马克，1922年10月的8马克，1923年2月的100马克，直到1923年9月的1000马克，再到1923年10月1日的2000马克，同年10月15日的12万马克，10月29日的100万马克，11月9日的500万马克，再到11月17日的7000万马克。

A newspaper rose from the initial 0.3 marks to 7000 million marks.With the devaluation of the currency, Germany entered hyperinflation. "Know yourself and know the enemy, and you will never be imperiled in a hundred battles."Let's first understand the horror of inflation.

Inflation refers to the continuous and general rise in prices for a period of time caused by currency depreciation due to the fact that the supply of money is greater than the actual demand for money under the conditions of paper money circulation, that is, the actual purchasing power is greater than the output supply.Its essence is that the total social demand is greater than the total social supply, that is, the supply is far less than the demand.

In February 2009, the governor of the Central Bank of Zimbabwe decided to drop 2 zeros from the huge banknotes it issued in response to the country's staggering inflation.In this way, Zimbabwe's one trillion banknotes are equivalent to 12 yuan.In other words, Zimbabwe's inflation rate has reached 1 billion percent at this time.

It can be seen that the money supply rate is higher than the growth rate of the economic scale, that is, the issuance of banknotes exceeds the amount of currency actually needed in circulation, which is the main reason for inflation in Zimbabwe.

Regarding the problem that the issuance of banknotes will exceed the amount of money actually needed, economists say that both foreign trade surplus and overheated investment may lead to this problem.

First, let's talk about foreign trade surplus.For any foreign trade company, the US dollars exchanged for its exported goods must be handed over to the central bank, and then the government will return the currency to the company. Therefore, the central bank will print as much domestic currency as the company earns.In this way, in the case of a surplus in foreign trade, a large amount of paper currency is printed in the country, but inflation is likely to occur in the circulation of goods in the domestic market.

Inflation is usually caused by problems in the general level of economic operation, and its essence is that the total social demand is greater than the total social supply.Thus, overheated investment may also lead to inflation.In order to achieve the purpose of stimulating the economy through investment, the governments of many developing countries will increase their investment in infrastructure construction.Thus, the possibility of printing more banknotes increases.

In addition, in our real life, there is also a hidden inflation.The so-called concealed inflation refers to the existence of inflationary pressure or potential price rise crisis in the social economy. Due to the strict control of the government, inflation does not really occur.And once the government loosens control, inflation will happen randomly.

Many people worry about inflation when their money starts to lose value.But some economists say that a price increase rate of 2.5℅ is called unconscious inflation.They believe that moderate inflation will not cause too much social chaos, but will stimulate economic development to a certain extent.

Today, with the rapid economic development, although ordinary people have greatly increased their attention to inflation than before, facing the problems mainly caused by the general level of economic operation, in addition to physical investment, reducing currency inflows and other measures, people More still rely on the government to regulate and control the loan interest rate and monetary policy.

Deflation, when the currency in circulation in the market decreases, people's monetary income decreases, and their purchasing power decreases, which affects the decline in prices and causes deflation.Long-term monetary tightening will inhibit investment and production, leading to higher unemployment and economic recession.The understanding of its concept is still controversial.But economists generally believe that when the consumer price index (CPI) falls for three consecutive months, it means that deflation has occurred.Deflation is the continuous decline of prices, wages, interest rates, food, energy and other prices caused by excess capacity or insufficient demand.Paul Samuelson, the famous Nobel laureate in economics, stated that a general decline in prices and costs is deflation.

(End of this chapter)