This post is a follow-up to the article by Felix Santana Garcia, The People Lie Helpless. Here are some photos of areas where the poor live in the Dominican Republic. Granted the poverty there is a result of many years of poor economic guidance in terms of marginal social benefits and marginal social costs. Their […]

I worked with Dwaine Van Vuuren of Recession Alert a few months ago on using the effective demand limit to detect recessions. He said the effective demand limit gave the best detection of a recession he had ever seen. He said he had seen hundreds. I want to show you one graph he came up […]

Menzie Chinn over at Econbrowser posted on low inflation today. His argument is that there is still lots of slack from real GDP being way below potential real GDP and from high unemployment. The idea is that abundant slack depresses prices. Inflation is generated as slack capacity is utilized. It’s the normal result of labor market […]

People need money. That is the purpose of the Fed’s loose monetary policy. But there is no transmission mechanism that gets money into the hands of people. Money is predominantly created in the economy through loans and credit from banks. Banks have to make loans or extend credit in order for people to have more […]

This is an article published yesterday by an acquaintance of mine who lives in the Dominican Republic, Felix Santana Garcia. He writes a weekly article for an online newspaper there. (I translated the article from Spanish.) The People Lie Helpless By FELIX SANTANA GARCIA * The author is a financial manager and university professor. Living […]

To find out if productivity is really demand constrained, let’s look to see what happens when productivity is up against the effective demand limit. We will find that productivity stops and sits for a number of years. First we get the data and build the model. The data will come from this graph at FRED. […]

I was watching a video from the World Economic Forum 2013  in Davos, Switzerland. The video is a panel discussion on the subject, “No growth, easy money, the new normal”. The World Economic Forum 2013 took place in January 2013. It is basically a discussion of monetary policy in dealing with the crisis. In the […]

Here is a 12 minute video on youtube of an interview from Davos, Switzerland, with Robert Shiller from Yale University. He says in the video that taxes should be raised on the rich if inequality gets worse. He seems content with the current level of inequality. He says that economics is not an exact science. […]

CNBC has a video on youtube about the concern over machines replacing people. They actually touch upon many relevant aspects of the issue… high unemployment, increasing corporate profits, productivity of machines, rising real GDP, stagnating median household incomes, low minimum wages and even social instability. Replacing people with machines, like paying lower real wages, is […]

A quick post about a video that came out on July 17th on youtube. It is a video over one hour long where John Mauldin has a series of interviews with Mohamed El-Erian, David Rosenberg, Barry Ritholtz, John Hussman and Kyle Bass. These economists give their insights into “investing in the New Normal” economy. The […]