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In defence of models

Perhaps not so glamorous as the ones on the runway, economic models often get a bad wrap. Yannis Goutzamanis analyses some well-known and much used models and gives his take.

Tragedy of the Oreos

Most mornings I am confronted with a choice of what to eat for breakfast. As a semi-rational individual, one would assume I would seek to maximise my benefits while minimising opportunity costs when making this choice.

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Self-managed super funds: a blessing or a bomb?

I remember sitting in a finance lecture on superannuation, presumably paying little attention, until the lecturer suddenly decided to embark upon a tangential rant. Being an avid listener of talkback radio on the long drives to and from Monash University, Clayton, I had acquired a taste for the rhetorical art-form commonly known as ‘the rant’. I listened keenly.

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That old chestnut: revisiting the minimum wage

 While reading fellow ESSA contributor Joey Moloney’s article I came across the under-consumption paradox. This was something that I had grappled with before in trying to reconcile the microeconomic lessons about price floors and the minimum wage with macroeconomic lessons about aggregate income and expenditure and the Keynesian Cross. It seems many other people have observed this contradiction before, including Karl Marx.

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The ‘calculus of negligence’ and economic efficiency

When I saw the word calculus in my lecture slides I had to double-check that I wasn’t actually sitting in an economics class. Sure enough, I was in a torts law lecture.

In the tort of negligence the ‘calculus of negligence’ is a term used to describe the weighing up of diverse variables to assess whether a party has behaved appropriately in the face of a foreseeable risk. This inquiry is made to determine whether the party has breached a duty of care.

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