published Oct 31st 2016, 7:01 am, by Narae Kim and Tracy Alloway

(Bloomberg) —
If you thought economist humor didn’t extend beyond the joke about the $20 bill on the ground, you’re wrong.

This Halloween, a bevy of PhDs and financial experts took to Twitter to display economics-related Jack O’ Lanterns. The results of the exercise in “EconoPumpkins” are amusing, if not quite terrifying.

Justin Wolfers, professor of economics and public policy at the University of Michigan, started the ‘EconoPumpkin’ trend this year with the below tweet. His pumpkin shows the basic relationship between supply, demand, and prices. Not too spooky.
Justin Wolfers @JustinWolfers Announcing the Inaugural First Annual Once-a-Year Economics Pumpkin Carving Competition. Enter yours with hashtag… https://t.co/CfInHUd2UM Twitter: Justin Wolfers on Twitter
Economics writer Joe Atikian’s used ‘the rate of return on capital (r) > the economy’s growth rate (g)’, put forward by Thomas Piketty in his best-selling book “Capital in the 21st Century.” In other words, while the growth pace of developed economies has slowed down, the return on capital is relatively intact — with potentially scary consequences for global wealth equality. If his theory holds true, the inequality cycle perpetuates itself unless the government intervenes by, for example, hiking taxes on the top-income bracket.
Joe Atikian @joe_atikian Thomas Pumpketty.@JustinWolfers #EconoPumpkin https://t.co/1dGdMGYdOQ Twitter: Joe Atikian on Twitter
The favorite pick of Paul Wojcik, chief risk officer at T. Rowe Price Group Inc., was the Markowitz efficient frontier that shows how to optimize portfolios. In this graph with risk on the X axis and dividend-adjusted return on the Y axis, the hyperbola is the efficient frontier assuming no risk-free asset is available. With a risk-free asset, the straight line would be the optimal frontier.
Paul Wojcik @pwwojcik @JustinWolfers #econopumpkin #capm https://t.co/nBomXNVit5 Twitter: Paul Wojcik on Twitter
PhD Candidate in Economics, Julia Norgaard, carved the marginal rate of substitution (MRS), or the amount of one good which the consumer is willing to give up in return for an additional unit of another good — to maintain the same level of total utility, or satisfaction.
Julia Norgaard @Organic_Econ Marginal rate of substitution pumpkin! @JustinWolfers #EconoPumpkin https://t.co/RXpQORco91 Twitter: Julia Norgaard on Twitter
This pumpkin depicts a long-term look at returns on invested capital (ROIC) and economic profit (EP), which, according to Todd Houge, finance lecturer at the University of Iowa, are “difficult to sustain in the face of competition.” His idea was inspired by McKinsey & Co, which in February 2006 argued that “competition eventually compels most businesses to pass the savings along to consumers.”
Todd Houge @ValueKnight My @McKinsey “Valuation” inspired #EconoPumpkin entry. High ROIC and EP difficult to sustain in the face of competi… https://t.co/bazrXR1udT Twitter: Todd Houge on Twitter
This one perhaps provides the most insight into how economists see the world. It’s the opportunity cost pumpkin. The concept, which is used to compute cost-benefit analysis of an action, refers to what you must give up when you make a certain choice. In a world of scarcity, everything has an opportunity cost, or a trade-off. Another way of thinking about it: you can’t have your Halloween candy and eat it (too).
The Weakonomist @The_Weakonomist Was going to carve this, but my time was better spent with my toddler. So it’s my #opportunitycostpumpkin… https://t.co/uf8K2tcOnY Twitter: The Weakonomist on Twitter
More EconoPumpkins are over here.

To contact the authors of this story: Narae Kim in Hong Kong at nkim132@bloomberg.net Tracy Alloway in Abu Dhabi at talloway@bloomberg.net To contact the editor responsible for this story: Joe Weisenthal at jweisenthal@bloomberg.net

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