EconAir

  Introduction to Economic Theory   It’s not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change. Charles Darwin                                               Introduction and Summary Economic theory, generalizations about economies, and economic history began as attempts to understand the Industrial Revolution. The economic theory posts on this blog describe and analyze economic development and economic growth since the start of the Industrial Revolution in the late 1700s.  Some writers describe the current economic trends as the Fourth Industrial Revolution. Other observers and commentators believe that information and communication technology and applications have become so central to the economy that we are in the Information Revolution. And others believe that we are at the beginning of the Biotechno...

  By Dennis Schuchman   Everyone is saying that AI is about to change the world, and they’re right. After  decades of missteps and false promises, AI is coming of age and it will change the  world in ways that I can’t even imagine.   I’ve been in the computer industry for over 40 years now, but I’m not a computer  scientist. In fact, I’ve never even taken a computer science course. I’ve learned a  number of programming languages, how various operating systems work and how to configure hardware and software systems and networks to create computing  environments that let users get their work done. So, I’m not a scientist, but maybe more of an engineer. Or maybe just a mechanic. When it comes to AI, then, I’m just as much an outsider as anyone. Well, almost.   I think that the way the media present AI gives people the wrong idea of what it’s about. People seem to think that AI combines the best of human brilliance with cold, hard computer logic....

  The Red Queen's Race TWO DEFINITIONS   Fed funds rate .    The Fed funds rate is the interest rate banks charge other banks that borrow their excess reserves. It is a very short-term (overnight) rate. An increase in the Fed funds rate increases the cost of capital of large banks (net borrowers) and puts pressure on these banks to raise their lending rates. A change in the rate also changes the rate charged by other sources of short-term funds.   The Fed funds rate is the most watched interest rate in the United States and probably the world. It is not set by supply and demand in financial markets. It is set (fixed) by the Federal Reserve Bank (the Fed), America’s central bank.    The Fed funds rate determines or heavily influences almost all other short-term interest rates in financial markets. It also indirectly influences many other longer term interest rates. It summarizes how the Fed views the economy and near-term changes. It is at the heart of ...

Written by Andrea Dragon, Ph.D. Dr. Dragon investigates and writes about New Jersey's industrial history. Professor Dragon will be teaching a continuing education course on "New Jersey's Explosives History" at Rutgers - New Brunswick on October 8, 2025. See details at the end of this essay.   1914:  World War I Breaks Out   Russia started to modernize its army in 1913, with substantial French financial and weapons support. The beginning of a five-year plan, one of the main goals was to expand artillery to catch up with Germany. But war broke out.    After the first four months of the war, all combatants realized they were in for a long war with deadly modern weapons. Every country’s strategy of a quick victory through offensive warfare failed. Germany did not defeat France and England in the west, and the Russian offensive against Germany in the east ended in disaster. The result was four years of trench warfare in the west and three years of large-scale bu...