Tag: Economic Systems
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Path Dependence
Path dependence underscores how past choices shape present outcomes, often solidifying specific trajectories. Elements like sunk costs and increasing returns further entrench these paths. Though rooted in economics, the principle illuminates patterns in political, technological, and sociological realms.
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Negative Externalities
Economic activities can impose unaccounted-for costs on society, known as negative externalities. These inefficiencies often lead to government interventions and have widespread implications, affecting issues as significant as climate change and public health.
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Seigniorage
Seigniorage denotes the profit made by a government from issuing currency. It not only acts as a revenue source, but also impacts inflation, debt values, and monetary policy. In the digital age, its relevance extends to cryptocurrencies and their unique economic dynamics.