A commenter on our Angry Bear blog, Axt113, asked questions to understand what effective demand is. He/she like many think that effective demand is simply aggregate demand. But that is not true. They are different concepts. It is very important in the current economic sickness to understand the role of effective demand. So I will […]
As the ECB (European Central Bank) loosens monetary policy even more in the face of falling inflation, we will see a test of the Fisher Effect. The idea is that inflation is low because nominal rates have been low and projected to stay low for a considerable length of time. The actions of the ECB […]
Barry Ritholtz has a post showing that rates are very low in many countries. He isn’t quite sure what is going on with such low yields on 10-year bonds, so he asks… “What is up with Yields?” Maybe we could say that there is lots of liquidity out there. Maybe we could say that there […]
I have seen the top of the Dow Jones index as 16,800, but when the ECB loosened monetary policy to an extent never before seen last week, the Dow Jones lofted over 16,800. It is now hovering below 17,000, but there are concerns that it should not loft higher. I refer to an article by […]
The Real News Network interviewed 2 scientists about a new study on current extinction rates. The scientists interviewed are Dr. Terry Root & Dr. Stuart L. Pimm. The study shows that extinctions are occurring much faster than previously thought and that within 100 years, one third to one half of all species could be extinct. […]
I wrote back on January 28, 2014… “This is a character defining moment in capitalism, when the majority are not aware that the end of a business cycle is forming. There is asymmetric information, if you will. A few understand it. The majority do not. So what should be a time of seeking a sustainable […]
In China, imports have fallen quite a bit recently. The drop in imports was not just in commodities like copper and iron ore, but in non-commodities too. The implication is that their domestic demand is weak. From a WSJ article, Economists React: China’s Sluggish Imports Raise Concerns. I focus on the comment by one economist […]
It is common to see economists saying that once wages start to rise, inflation will rise too. Yet, I have been writing that inflation may not rise if wages rise. The reason is that capital income is consuming in historically tremendous amounts. And a rise in wages could mean a decline in profits, which would […]
Yves Smith at Naked Capitalism showed concern over my last post on rising labor share… “In reality, it’s even worse than that. I hate criticizing writers whose work I generally like, but as a contrast to this talk, I suggest you look at a new post by Ed Lambert at Angry Bear. In it, a […]
When an update to Labor share of national income is released by the Bureau of Labor Statistics, it does not make headlines. Yet, it gives insight. The BLS released today their revised Productivity and Costs report for 1st quarter 2014. In the 1st quarter of 2014, the non-farm Business Sector Labor share index was revised […]