Tag: economics

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Former Crypto currency

The rationale behind a Crypto currency is quite an ancient idea. In the absence of a central bank or in addition to it, people may choose to establish their own currency or currencies. The central idea is to secure assets (currently and in the future) as well as to enable an exchange between a community of people. The Museum of the National Bank of Belgium (image below) has a “Yap stone” on display which originates from the Pacific Yap Islands. Even very heavy and big stones served as wealth storage. The idealistic value of a particular stone conveyed additional value. In the true value of the word these people were banking on stone money in a way not to distant from what Crypto currency embodies today.

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AI in Central Banks

Yes of course, Central Banks will use AI, and some do so already (Kazinnik and Brynjolfsson, 2025). Beyond the standard application of AI by its employees, there are many potentials to use AI to analyse and publish data at a faster rate or in order to detect financial crimes. Similarly, data collection based on webpage harvesting might yield new indicators of inflation, expenditure for environmental risks (heat waves, flooding etc.) earlier and in addition to the normal set of indicators. Hence, Central banks might be better and faster in forecasting inflationary tendencies using more AI tools in their daily routines. Of course, it is difficult to predict a disruptive tariffs policy of a major economic player in the world economy, but the calculation of more, even hallucinatory scenarios become more feasible. It is feasible to weigh overall risks of different scenarios to the economy.
(Image: Celtic coins, Museum of the Belgian National Bank)

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Vacation money

The budget for a vacation, depending on your destination, is subject to exchange rate adjustments. If there are several months between planning and traveling the exchange rate like between the US $ and the Euro € has fluctuated recently by 10% in favor of the €uro. Nice for those receiving salaries in € and who spend their vacation in a region using the US $ as main payment currency. International tourists frequently calculate in $ and therefore might find Europe a bit more expensive than before the return of Donald Trump in the USA.
However, for all those who live in the Member States of the Euro-area and take their vacation there as well, they no longer think in exchange rate risks to their vacation budget. Additionally, there are almost no risks to be subject to fake money transactions like in unfamiliar currencies.
In the Euro area we can use for example backlight to make sure a 50€ bank note is a real one. Happy vacation! 

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Geo-politics of Electricity

Think of a society only based on electric energy. In the 21st century this energy stems from photovoltaic cells, wind and water turbines as well as geothermal energy sources. Each region of the globe and even within a country has its own kind of access to electric power specifically originating in the geographic and geologic context. This means we are returning to a phase in which “natural monopolies” of power generation have their comeback. Rather than nation wide power monopolies, the regional specificity becomes important again. Of course, this raises a lot of geopolitical issues and maybe tensions. Local economies will develop their own electricity provision. Larger and smaller companies can reorganize their power provision themselves. Energy monopolies become outdated if the infrastructure and legal frameworks are adapted to the potential of the “All electric society” conditional on new forms of “power” sharing. Electric and political power sharing will be key in the geo-politics of electricity.

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Green trade flows

The statistics on trade flows reported by the UN Department of Economic and Social Affairs have a comprehensive data base in the background. The descriptive inspection of the raw data on trade flows comprising solar panels, batteries and electric vehicles shows a stark imbalance of how future-proof the trade between countries is. The New York Times (David Gelles et al. 2025-6-30) has put this information into an impressive graphical design to show the magnitude of the imbalance of how China trades in green products with the world and how the USA is losing out on future-proof low carbon emission trade. Despite the fact that China is still heavily emitting CO2 today due to burning coal for electrical power, the investments at home and trade with the world is moving into the opposite direction. We have seen many of these industries at risk in Europe, like solar panel production, batteries and increasingly electric vehicles, without the western countries getting organized to address crucial business and economic challenges. Falling behind in these industries and trade will shift global balances in the near future. Renovation through innovation is more promising than holding on for another decade to inefficient and more polluting energy sources. Repairs of homes and buildings have long lasting effects, which we can, nevertheless, change today.

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Learning by using

Is learning by using different from learning by doing? In an economic model to test the employment/unemployment impact of AI in the USA, Wang & Wong (2025) suggest an important impact of employees’ productivity due to learning by using AI. In terms of the traditional language of economics the employees who use AI in their work shall have comparative advantage to those who don’t.
In a model of job search in the economy there is the additional possibility, similarly to robots previously, that certain tasks maybe influenced by the, more or less, plausible threat of an employer to replace the employee by training an AI system to perform the tasks. The credibility and acceptability of such threats are likely to impact wage claims and unemployment risks. All these effects do not happen instantaneously, but evolve over time with varying speed. Hence, calculations of effects have high error margins. The resulting model yields oscillations of “labor productivity, wages and unemployment with multiple steady states in the long run”.
Learning by using seems to be a good description of what occurs at the micro level (the employee) and at the macro level of an economic sector or the economy as a whole. Society may guide the use cases of AI just as much as the business case to use AI, for example in the creative industries as infringements of copyrights may occur on a massive scale. However, learning by using is not free of risks to society at large. Just like allowing people to use automotive vehicles has lead and still leads to thousands of deaths annually, learning by using produces external costs. Overall, this is another case for a benefit/cost analysis for businesses, the economy and society.

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Pervasive waste

From time to time waste from so-called highly developed countries is making headlines and then it is forgotten again. Huge amounts of plastic waste gets shipped for example from the USA to Malaysia in containers regularly (NYT 2025-7-1). The dumping of waste in other countries where it is cheaper to waste the waste is a cynical practice. Not only is the potential for reuse and a circular economy disregard, the little control that is exercised how the waste is treated afterwards is neglected. Some might just end up in our oceans later on or find its way in our food chains. The recent discovery of lots of nuclear waste at 5000 m depth in the sea in another extreme example of this practice to dump waste affecting all of is when profits have been accumulated inn the hands of a few enterprises and states. Such external effects as they are called in economic theory are part of the standard economic thinking. The challenge is to detect such behavior, persecute or better prevent it. This calls on countries who produce the waste to check for the contamination potential and treat their own waste. Fukushima has lots of barrels of nuclear waste waiting. The pervasive nature of this waste will make it last for thousands of years. “Beggar thy neighbor” with your waste is a major default of our current economic and social model. It remains an unresolved puzzle why mankind continues to work towards its own extinction. (Image: Le grisou, Constantin Meunier, MRBAB, Brussels). 

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History coined

It is an ambitious project to frame history of a country or continent according to the succession of coins. In the KBR such an attempt is currently on display in 2025. The history of a country in the center of Europe is reflected sometimes through different occupying forces who imposed their currency onto the occupied territories. The Greeks and Romans had an overriding impact on the development of coins in human history and society.  Precious metals were used as basis to embody lasting value into coins. The images on coins are also a way to reiterate the dominance of a new ruler or governance. From the Roman occupation there are nice specoin the KBR collection as Julius Caesar named one part of the 4 occupied territories “Belgica” beyond what we define as borders of Belgium in the 21st century. Control of your own currency means also to be able to produce unique pieces in your own foundries. The history of coins is also a history coined by those in power to enforce their political power onto the economy. (Image: KBR, The history of Belgium illustrated through coins, 2025).

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Home financing

For most people the biggest investment decision during their entire life course is the decision how to finance their home. The calculation of the costs of a bank loan over 10, 15 or 20 years to finance the acquisition of a home is a necessary part of basic financial literacy. The contract of monthly installments over years, considering economic uncertainties like inflation and interest rate payments, necessitates some basic knowledge of calculus and maybe the use of a spreadsheet to prepare payment plans with different scenarios. According to the Wall Street Journal of 2025-6-25 many home owners in southern states “slipped under water” in recent months in the USA. In short, buying a house when they are most expensive with a high interest loan and little down payment puts you at high risk if the prices for homes decline, for example like in a recession or stagnation. You can find yourself in the situation that the mortgage you have to pay suddenly exceeds the value of your home at actual prices. It is really important to be aware of the overall economic situation and risks of changes, like interest rate or inflation spikes due to a changing policy on tariffs. Reading and learning about financial risks should really enter into the school curriculum, but not left to maths classes as this will frighten off many students to take this topic seriously enough. 

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Robot repairs

Robots have been used mostly in industry for assembling, transport or sorting tasks. There is also a role in disassembling to enhance circularity. To repair electric or mechanic devices there is an enhanced version needed which starts with a diagnosis of the problem. Algorithms can sort out promising from dead end routes of repairs. However, the recognition of objects into things that can be repaired and those without repair potential is a worthwhile assistance. Beyond the economic and ecological rationale for repairs, there is an emotional or nostalgic sense to it as well. Maybe, from a life course perspective any object related to the teenager years of a person qualify for nostalgic value. Even simple robots or AI-assisted objects may qualify for this in future. Artificial friends will be like tamagotchis in need of repairs.