Vis Brad Delong’s post on CORRECT PREDICTIONS AND THE STATUS OF ECONOMISTS Paul Krugman is certainly right that history has judged, and that the judgment of history is for James Tobin over Milton Friedman so completely that there is not even a smudge left where Friedman’s approach to a monetary theory of nominal income determination […]
In the circular flow model that I use, as imports rise so does gross saving. And does that increased saving show up in increased investment? How would imports lead to more investment? Here is the model as a closed economy without imports and exports using 1st quarter-2011 data as an example. link to Graph #1 […]
July 31 saw the latest release of European Union unemployment numbers, and Monday’s gross domestic product figures brought no joy, especially for Greece. As Think Progress reports, Greek unemployment hit a new record of 27.6 % in May, while Spain’s June unemployment figure was 26.3%, according to Eurostat. As the world’s biggest experiment in austerity, […]
When the Fed started QE they viewed it as a stimulative, easing of monetary policy. Now they are arguing that tapering or reducing QE is not tightening. Can both of these two positions be correct?
Before this last recession, readers of a long time here might recall that I used my flower shop as a barometer for the economy. I noted that things were not doing well as our sales had started to decline in August of 2006. The smart boys and girls called it December 2008 as starting December […]
My last post on the circular flow using labor and capital incomes sure was a mess. As you would see, some of the post had to be scratched out. I was not happy with the circular flow. What you are witnessing is a creative process. The circular flow model needed a lot of work. So […]
This is a quick post to a question in the comments section by Jerry Critter on the circular flow model using labor income. He asks, “To improve the economy, we hear two somewhat conflicting stories. One, we need to increase government spending, or, two, we need to reduce business taxes. Can your model compare the […]
Joseph Stiglitz offers perspective on the bankruptcy of Detroit and its wider context: At one level, one might shrug: companies die every day; new ones are born. That is part of the dynamics of capitalism. So, too, for cities. Maybe Detroit and cities like it are just in the wrong location for the goods and […]
As I said, I was going to post a version of the circular flow model for current conditions of the economy. Setting up the model Conditions for national accounts and other numbers are currently… (See these graphs CGINX, XM, Undistprof) Real GDP of $15.650 trillion. (2009 dollars) Effective demand limit of $16.1 trillion. (real 2009 […]
I want to expand on the last post where a simplified circular flow model was given incorporating labor share of income. That circular flow did not include sectors for a government nor foreign markets. I now will expand that model to include those sectors and more. Extended circular flow for labor share Here is the […]