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Jason Welker

CARPE DIEM: U.S. Share of World GDP Remarkably Constant - 5 views

mjperry.blogspot.com/...e-of-world-gdp-remarkably.html

shared by Jason Welker on 25 Nov 09 - Cached
gene hayward liked it
  • The chart above shows the annual shares of real world GDP for four geographical regions (European Union 15, Asia/Oceania, Latin America and the combined share of Africa and the Middle East) compared to the U.S. share of world GDP between 1969 and 2009 (data here). What might be surprising is that the U.S. share of world GDP has been relatively constant for the last 40 years, and is actually slightly higher in 2009 (26.7%) that it was in 1975 (26.3%). It's also interesting that the EU15's share of world GDP has declined from about 36% of world output in 1969 to only 27% in 2009. Further, despite having a large share of the world's oil reserves, the Middle East's share of global output has increased from only 2.23% in 1969 to 3.16% in 2009 (graph shows Middle East combined with Africa).
  • Bottom Line: World GDP (real) doubled between 1969 and 1990, and has increased by another 60% since then, so that world output in 2009 is more than three times greater than in 1969. We might mistakenly assume that the significant economic growth over the last 40 years in China, India and Brazil has somehow come "at the expense of economic growth in the U.S." (based on the "fixed pie fallacy") but the data suggest otherwise. Because of advances in technology, innovation, and significant improvements in U.S. productivity, America's share of total world output has remained remarkably constant at a little more than 25%, despite the significant increases in output around the world, especially in Asia.
    • Jason Welker
      Jason Welker on 25 Nov 09
       
      A good conversation starter for an AP Macro class!
  • Somewhat surprisingly, the Economic Research Service of the U.S. Department of Agriculture has some great international historical macroeconomic datasets. According to its website:
  • gene hayward on 25 Nov 09
     
    I find it amazing (and troubling) that Latin America and Africa have made no appreciable gains in 40 years. They are rich in human capital and other productive resources....as a side note, I noticed in one of the comments on the blog you found this graphic there was some conversation about the CPI and that it was reconfigured in the 1990's(?) and that with the new method inflation is underestimated, therefore RGDP must be overstated...I have to admit ignorance on this issue...Are you familiar with it? Any commments as to the validity of the underestimation of inflation? Thanks!!
  • Jason Welker on 26 Nov 09
     
    Gene, I'm not sure we should be so troubled by the flat trend lines for Latin America and Africa. Keep in mind, this is not GDP, this is share of world's GDP. Unlike total output, which is NOT a zero sum concept, share of total output IS a zero-sum concept. A gain made by one part of the world is only possible by a loss made in another part of the world. The decline of the EU 15's share of world GDP does not mean that the EU 15 experienced a decline in output. In fact, the EU 15 have grown steadily over the last 40 years. Their downward sloping curve indicates that they have grown more slowly than the rest of the world, that's all. So the flat lines for Africa and Latin America in fact indicate that those two regions have grown more rapidly than Europe. Although it doesn't look like it on this graph, the "poor south" is actually catching up with the "rich north" as average growth in Europe lags behind that in the south. It's a bit misleading to interpret the graph in this way, but the gains in Asia have in a way come at the expense of gains in Europe, but only in that they now have a larger share of a MUCH larger pie! All regions have grown, and Latin America and Africa have grown AS quickly as the US, and MORE quickly than Europe. Good news!
  • gene hayward on 26 Nov 09
     
    Thanks for the reply and the analysis...I did not occur to me to think of it in those terms...I am better off for asking the question!!! :)
Jason Welker

400 Richest Americans Got Richer This Year, As Most Americans' Net Worth Tanked: Forbes - 3 views

www.huffingtonpost.com/...ichest-americans_n_736182.html

income distribution

shared by Jason Welker on 24 Sep 10 - No Cached
  • The richest Americans got even richer this year, according to the new Forbes 400 list, even as the country's total net worth tanked during the second quarter. The top 400, all of whom are worth at least $1 billion, saw their combined wealth increase 8 percent this year, to the dizzying total of $1.37 trillion, according to analysis from CNN.
  • This means the 400 richest people in America account for about 2.6 percent of the nation's private wealth
  • Jason Welker on 24 Sep 10
     
    What's happening to income distribution in America during the recession? 
Jason Welker

Life on Severance: Comfort, Then Crisis - WSJ.com - 1 views

online.wsj.com/...SB125780714976639687.html

keynesianism wages recession sticky wages unemployment

shared by Jason Welker on 10 Nov 09 - Cached
  • The family recently vacationed in Virginia Beach, Va., and likes to dine on Porterhouse steaks. Since losing his job, Mr. Joegriner, 44 years old, has had several offers. He's turned each down in hopes of landing a position comparable to what he held before.
    • Jason Welker
      Jason Welker on 10 Nov 09
       
      Unemployed Americans unwilling to accept lower wage jobs! This sounds like evidence of the "sticky wages" Keynesian observed in his arguments for fiscal stimulus!
  • Mr. Joegriner is a member of what might be called the severance economy -- unemployed Americans who use severance pay and savings to maintain their lifestyles. Many lost their jobs in 2007 and 2008, and thought they'd soon find work. Now, they're getting desperate.
    • Jason Welker
      Jason Welker on 10 Nov 09
       
      I bet these people just wish they had taken that good offer a year ago. Finance people laid off during this recession must have an artificially inflated view of their own value in the labor market: over-inflated like the assets they had dealt in!
  • Last week, lawmakers passed a bill extending unemployment benefits up to 20 weeks. Unemployment benefits, which typically last about 26 weeks, were expected to run out for 1.3 million people by the end of the year, according to the National Employment Law Project.
    • Jason Welker
      Jason Welker on 10 Nov 09
       
      Extending unemployment benefits, while it is a NICE thing to do, only increases the downwardly inflexible nature of wages.
  • ...3 more annotations...
  • The dramatic changes in such sectors mean that many of the eliminated jobs will never come back. Some workers may suffer a permanent hit to their standard of living.
    • Jason Welker
      Jason Welker on 10 Nov 09
       
      Why won't certain jobs ever return to the US economy? Is it at least partially BECAUSE American workers are so unwilling to accept lower wages?
  • When Michelle Patterson was laid off as an executive director of marketing for a publishing company in January, she figured she could subsist comfortably, at least for a while, on the $20,000 she had reserved from her savings and severance combined.
  • She spent as much as $250 a week on networking meals and drinks with contacts. Some days, she scheduled up to four coffee meetings a day, picking up the tab most of the time. She also spent $30 a month for pedicures and $150 on her hair.
    • Jason Welker
      Jason Welker on 10 Nov 09
       
      You've got to be kidding me! This is what our world has come to. Unemployed Americans, delusional about their own worth, spending $180 a week on what, mani-pedis?
  • Jason Welker on 10 Nov 09
     
    Things are scary out there for the unemployed in America! This article tells some sad stories of opportunities lost and next eggs blown! It also illustrates a key concept from AP and IB Economics: the theory of sticky wages and prices, at the heart of Keynesian macroeconomics. 
Jason Welker

Nouriel Roubini - What America needs is a payroll tax cut - 2 views

www.washingtonpost.com/...AR2010091605846.html

shared by Jason Welker on 17 Sep 10 - No Cached
  • The administration knows that it needs to fashion a revenue-neutral fiscal stimulus that increases labor demand and consumption. Its proposal to make permanent a research and development tax credit that dates to the 1980s, and then to enact a temporary investment tax credit allowing firms to write down capital investments at 100 percent of cost, are welcome -- but too modest a cure for what ails the economy. A much better option is for the administration to reduce the payroll tax for two years. The reduced labor costs would lead employers to hire more; for employees, the increased take-home pay would boost much-needed economic consumption and advance the still-crucial process of deleveraging households (paying down credit card debt and other legacies of the easy-credit years).
  • Jason Welker on 17 Sep 10
     
    Roubini says cut payroll tax to relieve households and encourage hiring.
Bret Willhoit

It's the Inequality, Stupid | Mother Jones - 7 views

motherjones.com/...quality-in-america-chart-graph

economy economics politics visualization charts income incometaxes tax taxes government

shared by Bret Willhoit on 26 Feb 11 - No Cached
  • Bret Willhoit on 26 Feb 11
     
    Some great charts that visually show just how unequal the two America's have become in the last 35 years.  
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