The world's funniest economics stories

Chapter 4 There are no rich people who don't understand the economy, and there are no poor people who don't understand the economy (3)
6. The chief culprit for the demise of the Ming Dynasty-money austerity
In 1438, in Nanjing, Zhu Yuanzhang established the Ming Dynasty. More than 200 years later, in 1644, Nurhachi led the Qing army to overthrow the prosperous Zhu family dynasty.There must be many reasons why a dynasty with a solid foundation was destroyed in a short period of time.For example, the corruption of the ruler, the peasant uprising caused by natural disasters that caused the people to live in dire straits, the dictatorship of treacherous officials and eunuchs, etc.But we cannot ignore one of the important factors, that is, the economic crisis led to the demise of the Ming Dynasty.It can be said that this is the chief culprit for the decline of the Ming Dynasty.

In the middle and late Ming Dynasty, because the rulers implemented an open policy, many coastal cities became gathering places for commodities.At this time, all kinds of opportunities were ripe, and the sprouts of capitalism appeared in China, and there were family workshop-style shops in affluent areas such as Jiangnan.At this time, the expansion of foreign trade made domestic production increasingly specialized and market-oriented.Although this is a good thing, there is also a hidden crisis: the regionalization and marketization of food production may cause and exacerbate the food crisis. If no food is grown in this area, the risk of food production will be huge.

At that time, the rulers did not issue banknotes, but used silver, gold, and copper as currency in circulation. However, China was not rich in precious metals, so copper coins were always used as currency in circulation. As for silver and gold, they had always relied on imports.Since China's export industry was very developed at that time, a large amount of porcelain and tea were sold to Europe, so a large amount of silver also flowed into the country. More and more silver made the supply of silver exceed the demand, and the price of silver also fell. Then it becomes lower.However, in the late Ming Dynasty, due to the decline in the output of the silver producing areas in America, the amount of silver flowing into China decreased, and the upper class of the society became obsessed with the "human body, antler, and mink" produced in Manchuria. Waiting for the three treasures of the Northeast caused a large amount of silver to flow to Manchuria, and the country's finances were short. Later, a peasant uprising occurred, and Manchuria also came to attack. The country did not have extra financial expenditures to fight the war, so it was quickly defeated in the war.Soon, the Ming Dynasty, which had been glorious for more than 200 years, also perished.

The reason for the demise of the Ming Dynasty still has important revelations in modern society. The chief culprit that led to the demise of the Ming Dynasty was the austerity of money at that time.

Money root refers to the circulation of money in the market.Monetary tightening means that the market needs less money but the amount of money actually circulating in the market is too large. The National Bank takes a series of measures to reduce the amount of money in circulation.

In the middle and late Ming Dynasty, due to the decrease in silver production in the Americas, China’s silver imports also decreased. However, the demand for silver in the society at that time was very large, and the dignitaries at that time preferred to use silver to buy. "Personal body, mink fur, deer antler" and other Northeast Three Treasures are used to show off wealth, causing a large amount of silver to flow to Manchuria, but the government's fiscal revenue is very small.At that time, paper money was not issued to alleviate the dangers brought about by this, so when there was a war later, the government did not have enough money to provide the army with war. I fell heavily.

When it comes to the major impacts of monetary tightening, first, it will affect the macro economy and indirectly affect the stock market; second, it will affect the capital supply of the stock market; third, it will affect people's psychological expectations; and finally, it will affect the operation of listed companies such as banks.

For the situation of monetary tightening, the relevant departments should have the following countermeasures: first, increase the deposit reserve ratio; second, raise the central bank's benchmark interest rate; third, increase the rediscount rate;

Currency refers to any commodity that can perform functions such as a medium of exchange, a measure of value, a deferred payment standard, and a fully liquid store of wealth, and can be regarded as currency; It is money; money is the product of the development of commodity exchange to a certain stage.The essence of money is the general equivalent.

Deposit reserve refers to the deposits in the central bank prepared by financial institutions to ensure customers' deposit withdrawal and fund settlement needs. The ratio of the deposit reserve required by the central bank to its total deposits is the deposit reserve ratio.

Open market operations refer to the activities in which the central bank adjusts the money supply by buying or selling securities, pumping in and out of base money.Unlike the securities trading conducted by general financial institutions, the purpose of the central bank buying and selling securities is not to make profits, but to regulate the money supply.According to the development of the economic situation, when the central bank thinks that it needs to shrink money, it will sell securities, correspondingly withdraw a part of the base currency, and reduce the amount of funds available for financial institutions; on the contrary, when the central bank thinks that it needs to loosen money, it will buy securities , expanding the base money supply and directly increasing the amount of funds available to financial institutions.

7. Poorer and poorer Ethiopia – polarized
During the No.60 United Nations Summit, the World Bank released a 190-page report, which respectively announced the world's 10 poorest and richest countries.Ethiopia tops the list of the 10 poorest countries.

According to the survey, Ethiopia's per capita wealth is only US$1965, which is nearly 648241 times less than that of Switzerland, which ranks first in the world's richest country, with a per capita wealth of US$330 according to the report.

In this report, in addition to the two rankings, we can also see a very shocking phenomenon: the 10 poorest countries in the world, except Nepal, are almost all in Africa, while the richest countries in the world are almost all in Africa. All in Europe.

We all know that in the international community, according to the geographical location of the country and the economic development of each country, it is customary to call the developing countries mostly in the southern hemisphere "South", while the developed countries mostly in the northern hemisphere are called "North". .Since the formation of the new world pattern after the Second World War, people have paid more and more attention to the issue of "North-South Gap" according to the growing gap between developing countries and developed countries.

Polarization originally refers to the two extreme trends of a small number of capitalists who are free from labor and a large number of wage laborers who sell their labor power from small commodity producers under the conditions of a privately owned commodity economy.In modern society, as the "North-South gap" continues to widen, developed countries continue to use their monopoly position to control the foreign trade of developing countries, like a pair of open scissors, reducing the primary production of developing countries. At the same time, the world market price of manufactured industrial products produced by itself is continuously raised.Developed countries have won high profits by using this trading method.Under the effects of constant suppression and scissors, developed countries are getting richer and developing countries are falling behind, thus forming a "polarization".

In international trade, developing countries mainly export raw materials, labor services and primary products, and import finished products, while developed countries rely on their own dominance in the economy to export finished products and import raw materials, labor services and primary products. Mainly.In this process, the price of raw materials, labor services and primary products is lower than the value, and the price of industrial products is higher than the value. Therefore, the scissors difference in international prices has caused developing countries to suffer huge economic losses in international trade.According to incomplete statistics, from the 20s to the 50s, developing countries suffered annual losses of more than 60 billion U.S. dollars from the expansion of the scissors gap.

In order to reverse this unequal transaction in the economy, since the mid-20s, developing countries have increasingly called for equal status in the international economic system, and economic cooperation in North-South relations has gradually become an important content of North-South dialogue.

In 1974, the United Nations convened a special meeting, which officially put the issue of North-South relations on the international agenda for the first time, and adopted the Declaration on the Establishment of a New International Economic Order and the Program of Action.The scope of the dialogue goes deep into various fields such as raw materials, trade, development, technology transfer, international currency and finance.After all the ups and downs, on October 1981, 10, at the summit meeting held in Cancun, Mexico, the possibility and urgency of global negotiations under the auspices of the United Nations were reaffirmed.However, because the views of the North and the South are far apart on a series of major issues, the North-South dialogue has basically stagnated.

At the United Nations General Assembly in 1993, Korea proposed four principles for North-South relations.

Although in the pursuit of equal international economic status, developing countries still have many practical problems to face, but I believe that with the joint efforts of developing countries, the future world economic development will break the bad situation of "polarization" .

South-South cooperation, that is, economic and technological cooperation among developing countries.Since most developing countries are distributed in the southern hemisphere or the southern part of the northern hemisphere, the economic and technological cooperation among developing countries is called "South-South cooperation".It is an indispensable and important part of international multilateral cooperation to promote development, an important channel for developing countries to rely on themselves and seek progress, and an effective means to ensure that developing countries can effectively integrate and participate in the world economy.

8. Shanxi people are richer than Guangzhou people? --Engel coefficient

As an indicator, Engel's coefficient is a measure of the standard of living of a country's residents.In a survey in 2005, the Engel coefficient of urban residents in Guangzhou was 37.31%, that of Shanxi urban residents was 33.5%, and that of Ningxia urban residents was 36.0%.

According to the standards proposed by the Food and Agriculture Organization of the United Nations, an Engel coefficient of 30%-40% is considered rich.This means that urban residents in Guangzhou have already entered a rich stage, while urban residents in Shanxi, Ningxia and other places have entered a rich stage earlier than urban residents in Guangzhou.

However, the results of such a survey make people can't help but have a feeling of "plausibility".

Engel coefficient, in 1857, the world-renowned German statistician Ernst Engel clarified a law: with the increase of family and personal income, the proportion of income spent on food will gradually decrease, this law is known as It is called Engel's law, and the coefficient reflecting this law is called Engel's coefficient.

In response to the fact that "Shanxi people are richer than Guangzhou people" mentioned in the previous story is contrary to the facts, experts point out that Engel's coefficient is only one of the indicators to measure the living standard of a region.

According to the standards proposed by the Food and Agriculture Organization of the United Nations, an Engel coefficient of more than 59% is poor, 50%-59% is food and clothing, 40%-50% is well-off, 30%-40% is rich, and less than 30% is the richest.

But there are many indicators to measure the living standard of a region, Engel's coefficient is just one of them.If only Engel's coefficient is used as a standard to measure the living standard of a region, it will inevitably be inconsistent with the facts.

The reason for this situation in the above example is that the Engel coefficient uses the ratio of food expenditure to total consumption expenditure to illustrate the impact of economic development and income increase on living consumption.As we all know, food is the first need for human survival, and it must occupy an important position in consumption expenditure when the income level is low.With the increase of income, when the food demand is basically satisfied, the focus of consumption will begin to shift to other aspects such as clothing and use.Therefore, the poorer a country or family lives, the larger the Engel coefficient; conversely, the richer the life, the smaller the Engel coefficient.This is a standard with regularity.

Of course, in reality now, some hidden factors have to be taken into consideration. These factors are not counted by people in the survey, but they are one of the factors of the coefficient of impression.As in the example, when it comes to the cost of food and clothing, the Guangdong and Guangxi regions are known as the gourmet world, and the catering culture in Guangzhou is known. In recent years, the habit of going to restaurants for New Year’s Eve dinners in mainland China is said to be originated from "Guangzhou Drive Guangdong, radiate South China, and affect the whole country".It can be seen that food expenditure is very important in the consumption expenditure of Guangzhou people.However, urban residents in the northern region, especially in the northwest region, are far less "pursuant" to food than those in Guangdong. On the contrary, the cold weather in the north makes people pay more attention to clothing.From this point of view, if Engel's coefficient is used to "compare wealth", the Guangdong and Guangxi regions will have no advantage, while the northwest region will rise.

Experts also emphasized that the Engel coefficient reflects a long-term trend and helps people understand changes in the consumption structure. Even if it is in the cross-section of each year when it is declining year by year, many incomparable factors must be eliminated.When it comes to consumption structure, in the current situation, it may be more convincing to use service consumption expenditure as a percentage of total expenditure than Engel's coefficient.

In economics, purchasing power parity is an equivalence coefficient between currencies calculated based on different price levels of various countries, so as to make a reasonable comparison of the gross domestic product of various countries.However, there may be a large gap between this theoretical exchange rate and the actual exchange rate.

(End of this chapter)