Skip to main content

Home/ Econ Teachers/ Group items tagged Demand

Rss Feed Group items tagged

Filter: All | Bookmarks | Topics Simple Middle
Jason Welker

Economic View - A Dose of Skepticism on Government Spending - NYTimes.com - 5 views

www.nytimes.com/...11view.html

shared by Jason Welker on 21 Nov 11 - No Cached
  • the centerpiece is likely to be a huge increase in government spending
  • John Maynard Keynes
  • A main focus was how to avoid, or at least mitigate, the recurring slumps in economic activity.
  • ...17 more annotations...
  • Economic downturns, Mr. Keynes and Mr. Samuelson taught us, occur when the aggregate demand for goods and services is insufficient.
  • Higher consumer spending expands aggregate demand further, raising the G.D.P. yet again. And so on. This positive feedback loop is called the multiplier effect.
  • these Keynesian prescriptions make avoiding depressions seem too easy.
  • each dollar of government spending can increase the nation’s gross domestic product by more than a dollar
  • The solution, they said, was for the government to provide demand when the private sector would not.
  • less than a third of the increase takes the form of private consumption and investment.
  • Professor Ramey estimates that each dollar of government spending increases the G.D.P. by only 1.4 dollars.
  • In practice, however, the multiplier for government spending is not very large
  • If you hire your neighbor for $100 to dig a hole in your backyard and then fill it up, and he hires you to do the same in his yard, the government statisticians report that things are improving.
  • it is unlikely that, having wasted all that time digging and filling, either of you is better off.
  • inefficient spending
  • bridges to nowhere,
  • increase in economic well-being.
  • a rigorous cost-benefit analysis of each government project.
  • To this day, we have yet to come to grips with how to pay for all that the government created during that era
  • a temporary crisis as a pretense for engineering a permanent increase in the size and scope of the government. Believers in limited government have reason to be wary.
  • tax cuts will be a larger piece of the Obama recovery plan than was previously expected.
Jason Welker

A Micro problem for the advanced Econ student | Welker's Wikinomics Blog - 5 views

welkerswikinomics.com/...-for-the-advanced-econ-student

microeconomics monopoly Mankiw

shared by Jason Welker on 09 Nov 09 - Cached
  • Jason Welker on 09 Nov 09
     
    I love that Harvard Economics professor Gregory Mankiw blogs, but I hate that has de-activated the comments on his blog. Yesterday he posted a question from his own Harvard introductory economics class.  Since he doesn't allow comments though, I cannot tell if I'm solving it correctly. So I will re-publish it here and ask my readers to solve the problem in the comment section. IB and AP students who have studied microeconomic should be able to put some of their basic algebra skills to work to solve this one.
  • ...2 more comments...
  • Molly Saso on 10 Nov 09
     
    I may be wrong, but initially profit maximizing P and Q are $7 and 3 at MC = MR with profit of $10.5. Subsequently at a world price of $6, domestic demand is 4 units, but the monopolist's profit maximizing Q becomes 5 units (at MC =P). Therefore he exports one unit and his profit becomes $9.5. Thus the answer is a bit unexpected. I am not sure, but if the world price is $7 then does he produce 6 units of which he exports 3 units, since domestic demand falls? That conclusion presumes that he acts as a perfect competitor in the world market, but probably he will find a way of gaining global monopoly power! Molly
  • gene hayward on 10 Nov 09
     
    I think I solved most of it...I look forward to the answer...:)
  • Jason Welker on 10 Nov 09
     
    Molly, could you explain how you determined that at a world price of $6, the firm's profit maximizing Q would become 5 units? Why did we equalize P=MC to find the firm's output at a price of 6? I see why the firm becomes an exporter at a world price of $6 if they produce 5 units (since domestic Qs exceeds domestic Qd) but just not why we determine the firm's output by P=MC. Thanks!
  • Molly Saso on 17 Nov 09
     
    I guess I am assuming that once there is free trade the monopolist has to act like a perfect competitor and at least in the world market is a price taker. It's a bit like the monopsonist who has to become a wage taker once there is an effective minimum wage. Consequently he employs more workers since his MFC equals the wage.
matthew_nogrady

On the Wrong Side of Globalization - NYTimes.com - 0 views

opinionator.blogs.nytimes.com/...he-wrong-side-of-globalization

trade globalisation economics inequality

shared by matthew_nogrady on 19 Apr 14 - No Cached
  • In general, trade deals today are markedly different from those made in the decades following World War II, when negotiations focused on lowering tariffs.
  • Today, the purpose of trade agreements is different. Tariffs around the world are already low. The focus has shifted to “nontariff barriers,” and the most important of these — for the corporate interests pushing agreements — are regulations. Huge multinational corporations complain that inconsistent regulations make business costly. But most of the regulations, even if they are imperfect, are there for a reason: to protect workers, consumers, the economy and the environment.
  • recent trade agreements are reminiscent of the Opium Wars, in which Western powers successfully demanded that China keep itself open to opium because they saw it as vital in correcting what otherwise would be a large trade imbalance.
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.
Susanna Pierce

India Rising - Globalization and the Middle Class . NOW on PBS - 0 views

www.pbs.org/...index.html

Marginal Propensity to Consumer Disposable Income Aggregate Demand

shared by Susanna Pierce on 20 Apr 11 - No Cached
  • Susanna Pierce on 20 Apr 11
     
    I use this clip to expand on the concept of MPC/MPS and Disposable Income before developing the Aggregate Model.
1 - 5 of 5
Showing 20▼ items per page