Sublime

Two great problems in Economics Allocation in the Economy Quantities: General equilibrium, international trade, game-theory outcomes . . . Formation in the Economy Processes: Of econ development, discovering novel technologies, structural change, arrival of new institutions, temporary phenomena like bubbles, crashes . . . The former is

Today’s summary is “ Industrial Policy in China: Quantification and Impact on Misallocation” , a working paper by the International Monetary Fund. China has long relied on industrial policy — government efforts to promote selected sectors — as a key economic strategy. This study by Daniel Garcia-Macia, Siddharth Kothari, and Yifan Tao

Partly they killed themselves through replacing profit-and-loss responsibility pushed down to the lowest levels with a functional management structure, where you only had to report to your boss. There was a programming department, the sales department, the client services department (whatever it was), and there's the project management department,

Disruptive innovation, the one you need to implement to remain competitive over the long term, employs a lot of capital and creates many jobs. But corporate executives usually favor efficiency innovation, whose main consequences are the freeing of invested capital (hence the record-high corporate dividends[263] in the recent period) and massive job

What this reveals is that improving profitability has two distinct management components. Some elements (predominantly short-run “hygiene” issues) get overmanaged, and many (long-run “health” issues) are undermanaged.

In a socialist system, government owns and controls the means of production, making it at once the sole buyer and seller of all capital goods in the economy. That centralization stifles the functioning of an actual market, making sound decisions based on prices impossible. Without a market for capital where independent actors can bid for capital,

This suggests that, from an allocative point of view, the market is about 33 per cent efficient.

of the firm’s entire productive capacity, 40 or 50 percent is consumed with a higher-priced person performing a lower-value task.