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 […]
by Linda Beale The Tea Party’s Disruptive Anti-Government (and anti-tax) Politics The New York Times ran an interesting piece by Kim Messick on the Tea Party’s psyche yesterday: Messick, The Tea Party’s Paranoid Aesthetic, New York Times (Aug. 10, 2013). It’s worth trying to understand this political group’s understanding of itself, since it ” is […]
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 […]
In another setback for President Obama’s health care initiative, the administration has delayed until 2015 a significant consumer protection in the law that limits how much people may have to spend on their own health care. The limit on out-of-pocket costs, including deductibles and co-payments, was not supposed to exceed $6,350 for an individual and […]
Brad DeLong adds his voice to the people addressing the retirement woes of many: Edward Filene’s idea from the 1920s of having companies run employer-sponsored defined-benefit plans has, by and large, come a-crashing down. Companies turn out not to be long-lived enough to run pensions with a high enough probability. And when they are there […]