What is Effective Demand? Keynes made it a central concept of his great General Theory book. But what is it? Well, the idea is that there is only so much demand in the population for products. And that low demand can keep the economy from reaching full employment. How does that work? Keynes pointed to […]

Yves Smith at Naked Capitalism lists posts and links to documents on private equity agreements well worth taking the time to read through and comment. The list is extensive so best go there. Dean Baker weighs in today as well in the Wall Street pension scam via Truth Out. We anticipate that some of you […]

by Joseph Joyce   Protesting Madame Lagarde The protests at Smith College that led to the withdrawal of Christine Lagarde, Managing Director of the International Monetary Fund, as this year’s commencement speaker have been widely denounced as a manifestation of intolerance. They also demonstrate a lack of understanding of the IMF and the many changes […]

by Barclay Rosser (reposted from Econospeak with permission from the author) Fred Hiatt Thinks Obama Not War whooping Enough In today’s Washington Post, editorial page editor, Fred Hiatt, has a column under his own name entitled, “A critique of Obama catches on.”  The critique amounts to Obama being “too passive” in foreign policy, with this […]

That headline makes quite a statement. But it’s true. The stock of so-called “financial capital,” or wealth — all the financial assets out there, which are ultimately claims on real capital — represents only the most tenuous long-term approximation of what our real capital is worth. Certainly true: the stock (total dollar value) of “financial capital” goes up […]

Arthur over at New Arthurian Economics has posted a much-appreciated though decidedly negative reply to my recent post on the nature of money and financial assets. He and I have had very similar thinking over the years (and he has provided me, at least, with some Aha! moments), so I’d much like to convince him to […]

This particular post was first picked up at Economist’s View and fits with Sandwichman’s posts on Labor. I have been watching Participation Rate in conjunction with U3 since 2001 along with others such as Laurent Guerby and while the US has decreased in the numbers of people in the Civilian Labor Force, our counterparts in […]

I have been following Sandwichman for a long period of time. Since I do shop floor throughput exercises which no economist appears to understand in a micro sense, Sandwichman comes the closest to what I deal with on a day to day basis. Paul Krugman in 2003: “Traditionally, it is a fallacy of the economically […]

In a post yesterday, I presented a graph of how inflation moves with changes in the Fed rate. I want to explore the graph further, because at some point the Federal Reserve will start to steadily raise their nominal Fed rate. How might inflation respond when the Fed rate starts to increase? The orange line […]

I’ve bruited the notion in the past that “money” should be technically defined, as a term of art, as “the exchange value embodied in financial assets.” In this definition, counterintuitively relative to the vernacular, dollar bills aren’t money. They’re embodiments of money, as are checking-account balances, stocks, bonds, etc. etc. Money and currency aren’t the […]