Friday, December 11, 2020

How I would teach money

 With a yard stick. Show the students that one stick is a complete set of possible money quantss, broken into three groups, then subdivided by multiples of a half.

The banks job is to keep those units of half multiplers from over running those three foot markers.  When the currency bank has done its job then one foot is 12 inches, almost everywhere and certainly good enough for Dollar tree.

It is a congestion problem, they have a crowd of inches waiting to trade, and a smaller crowd offeet as counter parties.

Then I introduce market maker, the pit boss who makes inches match feet. I would show that the smallest unit of price is about equal to the typical pit boss risk, is inch t feet error.  This is the 1,y,z Markov line, I would do no more, once they have a good wooden yards stick they make fine bankers.

If you want to tech them the broader lessons of economics, have them spend some days watching how Walmart does it. Walmart has the same problem, yard stick standards, except they count items per case in and items per basket out in the check outlines. It is still a measure theory, that makes it Markov, and that makes it a queuing analysis. 

When Walmart goods flow is stable, most shelves producing the typical yield, then Walmart can use liner approximation and consider arrival rates from infinite pools. They can multiply good in by case and match good out by basket, both measuring rod are working well enough to scale. But their is a lot of partitioning going on at Walmart, and they are all over the Markov tree even with low market volume because they do state switching very well which is why you see almost whole complete submarkets within the store.

They now they add more complexity then the customer can support, but then they watch when the moment comes to down grade one department over the other, on the margin. Close trackers of customer groups.

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