power parity (PPP) is the idea that, in the long run, exchange rates should move so that a given basket of goods costs the same across countries when expressed in one...
The core idea
power parity (PPP) is the idea that, in the long run, exchange rates should move so that a given basket of goods costs the same across countries when expressed in one...
Connected
Mental Model
Mental ModelAsymmetric Payoffs
situations where the upside is uncapped and the downside is limited. The expecte
Mental Model
Mental ModelBarriers to Entry
obstacles preventing new competitors from entering a market.
Mental Model
Mental ModelCollective Action Problem
incentives to free-ride undermine cooperation for shared benefit.
Mental Model
Mental ModelComparative Advantage
where your opportunity cost is lowest, not where you are best.
Mental Model
Mental ModelCreative Destruction
destroys established industries to create new, more valuable ones.
Mental Model
Mental ModelEconomies of Scale
scale drives lower unit costs, creating compounding cost advantages.