The IS-LM model is built upon two markets, the goods market (IS) and the money market (LM). The alternative view in this post will incorporate the effective demand limit into the IS-LM model. Money Market First The money market is described by a plot of the interest rate (y-axis) and the quantity of money (x-axis). The […]
The Myth of the “Free Market” and How to Make the Economy Work for Us MONDAY, SEPTEMBER 16, 2013 by Robert Reich One of the most deceptive ideas continuously sounded by the Right (and its fathomless think tanks and media outlets) is that the “free market” is natural and inevitable, existing outside and beyond government. […]
Take out one outlier month, and the ‘stunning growth’ in part-time employment falls from 59% to 19% of jobs added (Mark J. Perry, Carpe Diem, The American Enterprise Institute) Many are still quoting the grossly inaccurate figure of 96% of new jobs in 2013 being part-time. But even the actual 59% derives substantially from a […]
James Rickards wrote the book Currency Wars a few years back. (source video) He is supported by the Charles Koch Institute. He says the US wanted China to appreciate their currency, so that the dollar would depreciate, because the fed wanted to import inflation in order to meet their nominal GDP targets. His view is […]
4th District and the shutdown, this article describes the predominant sentiment in the 4th district, and certainly Rep. King’s loudly proclaimed views, on the “shutdown” and even “default” as being not so bad. Mr. King gets a solid vote from its voters. From this site comes information on the 4th district. I did look for […]
One thing that is seen sometimes is a strange teaching in economics and business. The teaching says that lower costs of production will increase the natural level of real GDP output. Now the natural level of real GDP output is considered the limit at which the economy can produce. It is seen as the total […]
On October 2, 2013 Chris Hayes had on Larry Kudlow to discuss the economics of the government shut down. All I can say is, I could not believe he was the one Chris went to for insight. Maybe he had to because, you know, Kudlow is related to him via the network they work at. But really, […]
Even if inflation (CPI less food and energy) stays steady between 1% and 2%, there really is no problem. Prices are still rising. Paul Krugman would like to see inflation rise because that would lower real interest rates. But that is not going to happen, and he shouldn’t be expecting that it will. Is there […]
In a previous post, I wrote about a natural rate of inflation. Does it really exist? What would it look like? We could understand a natural rate of inflation as the inflation rate at which the economy can most efficiently progress in terms of social benefits and costs. Some benefits are more employment, greater growth […]
Using data from Census Bureau Historical Income Table H-08 and CPI data from FRED (index 1982 to 84 = 100), I was able to calculate real median household income (RMHI) from 1984 to 2011. Graph 1 shows the results – annual data. Graph 1 RMHI – First View – 1982-4 $ Except for […]