…consumer has a long-term weakening of purchasing power on balance. Here is a conceptual equation for inflation. Inflation = (unit labor cost – labor share)/(utilization of labor and capital). According…

…The deep capital stock of the economy — including fixed capital, organizational capital, and what Arnold Kling describes as “patterns of sustainable specialization and trade” — was simply unprepared for…

…of labor and capital (the factors of production), labor share (a measure of consumption liquidity) and an inflation target. F = z * (T2+L2) – (1-z)*(T+L) – i F =…

A comment by Arne in a previous post raised the idea that a tax transfer from capital to labor would raise the effective demand limit. So a video was made…

…happen to capital flows? It is likely that capital will flow out of the country, given that the country started with a current account deficit this would be a problem…

How much spare capacity remains in the economy in terms of labor and capital? This question is an incredibly important one… and economists such as Krugman, Bernstein and Baker are…

…way into asset prices. We will need a tighter monetary policy to control the instabilities from too much liquidity among owners of capital. Paul Krugman wants wages to rise before…

…is not produced, so cannot be saved), and that financial assets are not “capital” (roughly, they’re claims on capital). But they do understand on some level: what Krugman calls the…

…the fundamental error guiding the Fed’s logic. I posted a model of the money market split into two sectors, one of capital income and one of labor income. Capital income…

…capital inflows to the developing economies drop by up to 50% by the end of the year. In the “overshooting scenario,” long-term rates rise by 200 basis points, and capital…