Why has Amazon suffered operating losses for years?
Is the lowest price guarantee good for the customer?
Will the 35-hour workweek help alleviate unemployment?
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How free is the free market?

Economics, which reveals the ever-changing world in detail.
Get through it in one volume!

Free market, minimum wage, privatization, sunk cost fallacy, housing market, boom and bust,
Happiness Economics, the Luddite Fallacy, and Capitalism's Economic Crisis
Even the conflicting views of Marx and Schumpeter on how things change…
We examine economics, a field that has undergone constant change over a long period of time, through 50 keywords.

Economics is fascinating despite all the variables and complex concepts.

All the variables that pop up in economics are an uncontrollable headache, but sometimes they come as interesting episodes.
That's the story of the Concorde passenger plane.
The economic loss from completing the passenger plane was obvious, but it was pushed through to the end because too much progress had already been made and it was symbolic of being a joint British-French project.
This is called the typical 'sunk cost fallacy'.
But even though it suffered financial losses, the Concorde remains one of the world's most famous passenger planes, capturing the imagination of many.
Sometimes, there are things that cannot be valued in money alone.

This book also covers some rather complex concepts, such as the bond market, modern monetary theory, the balance of payments, tariffs and free trade, and the multiplier effect.
These concepts may seem tedious to beginners in economics, but with a little patience and following the order of this book, they will become readily understandable.
『Useful Economics Dictionary』 has colorful photos, illustrations, and various diagrams appropriately arranged for readers.
Readers will be able to utilize this to experience a smooth introduction to economics.

Few modern people would want to return to the living standards of the 18th century.
No matter how many problems there are in the modern economy, it is undeniable that living standards have improved significantly over the past few centuries.
Economics has served as a foundation for rapid changes in both living standards and social opportunities.
--- p.10

What's important is the process by which the economy grows.
If a country were to experience a surge in fossil fuel use, workers working longer hours, and a growing military, all of this would be reflected in rising GDP.
However, all three of these are likely to lower the people's standard of living.
That is, the environment is becoming more polluted, leisure time is decreasing, and weapons are literally manufactured for the purpose of killing.

--- p.23

The rosy picture of economic growth and environmental sustainability can be misleading.
As the economy develops, some visible pollutants may decrease.
For example, even if coal heating is banned, it would be relatively easy to switch to alternative heating methods as new technologies emerge.
However, even as some visible pollutants decrease, invisible toxins and external pollutants continue to increase.
Among them, there are substances that can only be fully recognized in the distant future.

--- p.30

A side effect of division of labor is that it creates 'economies of scale'.
Economies of scale mean that as production increases, average costs decrease.
If you only want to produce one car, there is no need to build a large-scale assembly line and division of labor system.
Only when mass producing automobiles does a factory with a thousand workers and an assembly line become valuable.

--- p.46

For some companies, the ultimate goal may be to capture as much market share as possible, even if it means bleeding at first.
This strategy of accepting immediate operating losses in order to continue to expand market share is exactly what Amazon has been doing for years.
--- p.71

Supply-side policies also include deregulation of the labor market.
This includes weakening union power and lowering the minimum wage.
It also seeks to abolish laws that protect workers, such as those that make it easier to fire workers or limit the maximum number of hours they work per week.
The idea is that if the labor market becomes more flexible, companies will enjoy cost savings and ultimately hire more new employees.
--- p.89

During the 2008 global financial crisis, we experienced both inflation of up to 5% and an economic recession.
Central banks around the world cut interest rates to 0.5%.
As a result, savers were worse off, and real wages for many workers fell because inflation outpaced wage growth.
In 2022, several central banks faced a similar dilemma.
Raising interest rates to try to curb inflation risks triggering a recession.
--- p.107

Another policy aimed at reducing unemployment is a limit on the maximum number of hours worked per week.
For example, France has set a maximum working week of 35 hours.
The logic is that if working hours per worker decrease, businesses will have to hire more employees, which will reduce unemployment.
But the reality is not that simple.
Instead of hiring more employees, companies will look for ways to squeeze more efficiency out of their existing employees in 35 hours.
--- p.134

As we can see from many examples throughout history, bubbles eventually burst.
Examples include the 19th-century British railway craze, the stock market surge of the 1920s and the subsequent Wall Street Crash of 1929, and the recent boom and bust of the cryptocurrency market.
A sharp question here is why, despite the painful endings of many past investment crazes, people can't escape the bubble.
The answer lies in psychological factors.
We think we're smarter than we started out, so we can take profits when asset prices rise and sell before they fall.
Another psychological factor is the tendency to trust the wisdom of crowds.
When most people buy real estate and stocks, and renowned experts advise that now is the time to buy, they follow the trend and join the investment crowd.
--- pp.137-138

A key factor in privatization is the attitude of regulatory authorities.
When authorities become victims of regulatory capture (where interest groups bribe the government to create regulations that benefit them), they may become overly lenient with the very companies they are supposed to regulate.
Then, companies that capture the regulators raise prices and make more profits.
On the other hand, companies complain that regulations are so strict that they cannot raise prices enough to make long-term investments.
--- p.157

We often choose the less bothersome option among the choices.
Unlike the rational individuals depicted in economics textbooks, we don't have time to weigh every decision individually.
Similarly, anyone who wishes to donate their organs after death must carry a card.
But taking a different approach, we could issue cards to people who refuse to donate their organs.
In other words, if we change organ donation to an opt-out system, the number of people who 'choose' to donate their organs will undoubtedly increase.

--- p.236

In the early 2000s, many banks and mortgage lenders couldn't resist the temptation to take big risks.
In fact, for several years they have been reaping huge bonuses by taking advantage of rising home prices and a surge in new mortgage lending.
But banks have taken excessive risks with these 'easy loans'.
Eventually, the bubble burst, exposing the financial world's bad loans to the world.
Banks faced a liquidity shock.

--- pp.240-241