<t>Interesting question.A call option gives you the right to buy a thing for a certain amount of money.If the gift certificate gave you the right to buy a certain toy for $5 then you could model it as a call option and the infinite duration option would be more valuable than the month option.The mon...

<t>MG,I was trying to indicate that your example is a circular argument.You are saying that if we assume an economy can be modelled as if it is a sole trader company, then we can deduce from the way in which the model works that an economy functions like a sole trader company. i.e. all we have at th...

<t>Yes MG, if the year zero GDP is nothing and your island economy has no government and no employees, then cumulative growth in GDP is the same as cumulative profits less your initial capital (which you have brought in from outside the economy) - it couldn't be anything else. You may want to ask yo...

<r>MG,You say you know how GDP is calculated and how individual profit is calculated, but you're not sure if we can calculate total profit created by an economy?Well, surely you've sovled the problem. GDP is calculated by adding up it's component parts.There are people at the NSO who add up the prof...

<t>knightrider,I agree that there is plenty to take issue with in Krugman's article. But as acastaldo highlights he's not alone in thinking there is a problem with the size and/or complexity of some financial activity -we have a nobel prize winning economist, the head of the FSA and the CEO of Goldm...

<r>Any thoughts on Blankfein giving his two pence on bonuses and socially useless activity?Goldman chief hits at ‘useless’ bankinghttp://<URL url="http://www.ft.com/cms/s/0/ffb670be-9d33-11de-9f4a-00144feabdc0.html?nclick_check=1The"><LINK_TEXT text="www.ft.com/cms/s/0/ffb670be-9d33-11de-9 ... check...

<r>You should just have a look at wikipedia for an overview of how GDP is constructed and what it means.<URL url="http://en.wikipedia.org/wiki/Gross_domestic_productTotal"><LINK_TEXT text="http://en.wikipedia.org/wiki/Gross_dome ... oductTotal">http://en.wikipedia.org/wiki/Gross_domestic_productTota...

<r>Oblezin,You mean is Skapinker questioning the social value of economic growth?I don't think so. I think he's saying that over time different types of economic activity have been branded as socially useless. Although I think you are right in implying that there may be a continuum from this idea to...

<t>knightrider,Calling Krugman insane for questioning the role of some financial activity is a little harsh. It's a legitimate question.There is a nice piece in the FT today that is worth reading:.What is ‘socially useful’ is subject to fashionBy Michael SkapinkerPublished: September 7 2009 The disc...

<t>Birkbeck require all students to pass entry exams in mathematics and statistics following an a short introductory course. If you pass that you should be fine. Maybe best not to pay the fees for the MSc till you do.I'm also starting the MSc at Birkbeck - so maybe I'll see you there.All the best,St...