conveniently, UBS has published a 2009 report on Prices and Earnings in 73 cities.

using New York as the benchmark, here are the relative purchasing powers [...]]]> as a follow up–when comparing the price of public transport, a friend duly noted that it would be more interesting to see the relative purchasing power of people in these cities.

conveniently, UBS has published a 2009 report on Prices and Earnings in 73 cities.

using New York as the benchmark, here are the relative purchasing powers (income / price of basket of goods & services) of some cities of note:

In its report, UBS notes that when comparing purchasing power, the basket of goods and services would be different in Asian cities versus European or North American ones. For that reason, they came up with a measure based on the Economist’s Big Mac Index: working time required to buy a big mac (this is from page 11–download the full report for more info).

It’s funny to use Big Macs as a comparison, since going to McDonald’s in North America (as a cheap place to eat) is not quite the same as in Asia, where it’s more a gimmicky thing (since it would be much cheaper to eat, say, a bowl of noodles). I’m sure McDonald’s considers that when marketing (& pricing?) its menu…

oh what a beautiful mind.

creative destruction: Coined by economist Joseph Schumpeter (1883-1950). The elimination of one product by a superior product, the [...]]]> Nash equilibrium: Named after U.S. mathematician John Nash (1928-). In game theory, a concept where each player’s best strategy is to maintain her present (non-cooperative) behaviour given the present behaviour of the other players.

oh what a beautiful mind.

creative destruction: Coined by economist Joseph Schumpeter (1883-1950). The elimination of one product by a superior product, the process of competition through innovation. Argued as the driving force of economic growth and the raising of living standards.

Oligopolies. Patents. Incentives to innovate.

Neoclassical theories. Growth & development. Steady-state economics.

random fact: Schumpeter considered Léon Walras (1834-1910) as the greatest of all economists. And he didn’t think Adam Smith (1723-1790) was all that hot.

Vilfredo Pareto (1843-1923), who introduced the notion of Pareto-optimality (duh), also made a famous observation that 20% of the population in Italy owned 80% of the property. Italian/French engineer who turned to economics, he took over as chair in political economy from Walras at the University of Lausanne.

Though apparently they didn’t get along too well together.

Walras‘ father was a schoolmate of Augustin Cournot, who came up with an economic model to describe duopoly competition. That model’s prediction is that firms will choose Nash equilibrium output levels.