Group items tagged

The article talks about how Lithuania's industrial production has increased. This means the industrial aggregate supply has increased. I can't say if there was a shift or a movement on the curve, but it would be interesting to investigate more about this.

The article discusses how, in the past, the US government's response to foreign imports competing with the domestic steel industry has been to create trade barriers. However, as David Phelps, president of American Institute for International Steel, explains in the article, this practice takes away from the competition that should exist within a market, such as when two domestic steel industries are competing. On the other hand, what differentiates domestic competition and international competition is that US will lose output if it can't support its domestic industries.

The Nigerian government is trying to protect its local industries, and to do this, it is planning to implement more flexible trade policies. For example, the article talks about how for one period, tariffs will be capped at 4% rather than 2.5%, this gives the government more flexibility, so that it can adequately judge the needs of its industries.

The article I chose for this week talks about how organic foods are increasing in quantity and the industry is increasing in profit as well. Many people have started consuming only 'organic foods' and this is causing distress for the industry because they need to be able to supply more. However, some consumers consider the idea of 'organic foods' as just healthier foods but they aren't receiving the extra health they're paying for.

Fiscal policy is the set of policies relating to government's spending and taxation rates. Military spending is a part of government spending and is closely related to domestic industries, particularly in the U.S. The U.S. government is lowering the military budget, therefore decreasing aggregate demand both through government spending and through implications to other industries interwoven with military. So this is deflationary fiscal policy, which is reducing U.S. military power on a global scale.

The part which I believe is most important about this article is its demonstration of a business strategizing around macroeconomic change and not just microeconomic change. We mostly only think of this stuff on the small scale, pretending like we live in a global community in which a company can survive purely by being better than its competitors and not by having a stronger sub economy. The fact is, even in our growingly international market, that just isn't the case. Countries are like microeconomic ecosystems inside of one big habitat. Just because one has food in it and the other doesn't won't mean that the inhabitants of second ecosystem can just move to the first.

This article is essentially connected to aggregate demand (investments), but the following part can be perfectly analyzed with the this week's topic, aggregate supply: "The investment will also help U.K. energy security by reducing hydrocarbon imports at a time of higher international oil and gas prices. "Too often we've been seen as part of the problem, rather than part of the solution because production output had fallen. But we're stopping the decline and increasing output and that will have a more positive impact on the U.K. economy," Mr. Tholen told The Wall Street Journal. The higher investment in new projects and redevelopment of older fields will help bring another 500,000 barrels of oil equivalent a day onstream by 2017, taking output up to around 2 million barrels of oil and gas a day by 2017 or earlier. The higher investment in new projects and redevelopment of older fields will help bring another 500,000 barrels of oil equivalent a day onstream by 2017, taking output up to around 2 million barrels of oil and gas a day by 2017 or earlier." High international oil and gas prices mean higher average costs of production - change in the costs of raw materials, because oil and gas are widely used in most production processes. This is the reason for the shift of the SRAS inwards. However, higher price level means that the oil production and oil-transforming industries will increase their output. This is also great for the sake of price of imports, which are relatively too high, allowing domestic industries to decrease their average costs of production, meaning that SRAS will increase. So we should consider effects of both aspects and add them up in order to get a real picture (overall effect of current oil and gas prices). Investments are shifting the LRAS curve to the right, because there are likely to be improvements in the quality of the factors of production (technological advancements, discovery of new resources and re-establishing the past (oil) fields,

This article doesn't have as much economic terminology as I would have liked but it proves a very important point using a topic I really enjoy, chemistry. Helium is not thought to be a very useful nor uncommon element and while the former is completely untrue, the latter is just a bit misleading. It is the second most abundant element in the universe, the first being hydrogen, but it's not as easy for us to get. As most people know, helium is lighter than air, so every time we find helium we have to catch it before it escapes into the atmosphere. Once it makes it out of our grasp, whether via a balloon or from careless mining of natural gas reserves, it might as well be gone. In the late 20th century, the US government had a huge reserve of helium gas and so, to get rid of a lot of it, they artificially set the price so that it costed less than it really should have. Even though we now recognize the value that this noble gas has, the price still hasn't been increased properly and it is still being sold off by the tank full for birthday parties and other celebrations. Helium is used for a lot more than sounding like a chipmunk. Without it, technology such as rockets, lasers, and the Hadron Collider wouldn't work. What this all goes to show is that the scarcity of a product isn't just about how much of it exists, but how much of it we can get to.

Pound sterling / euro exchange rate has increased, meaning that pound sterling appreciates in value. That is due to a run of good economic data and Britain's industrial output in June rose much faster than forecast and hit its quickest pace in two years. I believe demand for sterling, which reflects the value of its exports of goods and services rose because of the peak tourist season in Britain (urgency to buy foreign currency) and increased industrial activity. However, as far as many economic analysts are concerned, sterling will continue to weaken in a long run...

These days, with an economy recovering from a slight collapse and people looking to alternatives to gasoline and coal, a shortage of oil is not very good for the fossil fuels industry. Yesterday, the Organization of Petroleum Exporting Countries announced that oil prices would remain stable, even in these times of uncertainty. With all the negatives of oil (the pollution, the wars it has caused, the danger it can put workers at to obtain, etc.) demand has started to decrease. But, petrol suppliers can't just increase their prices like the supply demand curves might predict because they don't want to risk scaring the remaining consumers into thinking the price of oil will only increase as more of it is used up. This has left OPEC and all of it's members in a bit of a pickle.

Punto Fijo, November 22nd, 2012 (Venezuelanalysis.com) - The Venezuelan government has announced new controls on the prices of housing rents, while prices of medicines are also currently under review. Many basic goods in Venezuela are subject to price controls, including some food items and domestic goods, and the government has now added housing rents to the list of products subject to regulated pricing. In taking some pointers from "The Rent Is Too D*** High" party, Venezuela has decided to set a case to case price ceiling for the housing rental market. Most landlords will set the price based on construction costs, which tends to put tenants in a tight situation when looking for a somewhat temporary residence. Because of this, the government of Venezuela has forced landlords into setting prices only as high as what the Housing Ministry determines to be the true value product. Venezuela has also started doing this with medication, since medicine should be made available to all who are in need of it, although there has been backlash from pharmaceutical companies. They argument is that the artificial lowering of prices in the pharmaceutical industry will cause suppliers to produce less of the medicine than what the population needs.

This article gives a short briefing on how the Indian government are imposing price controls on a huge number of drugs in India. The new cabinet was forced by the Group of Ministers, and was also requested by the Indian Supreme Court, so it is obvious that this was necessary and quite urgent, as the court gave two weeks to fix the cause.

You don't have to read much of this article to understand the gist of what the author is saying. As we all know, the business cycle fluctuates like a sin graph, except, at the same time, the real GDP steadily increases as more innovations are made the things can be done for cheaper. Paying attention to those ups and downs are important for governments because, when the downs occur, the government needs to put in more spending to cover for private industries and to try and stimulate the economy. However, what the US government has failed to do now-a-days is lower spending when the economy has built its way back up and above where it was before. This isn't because US citizens will start mass protests in the streets against a higher sales tax or less funding for the public education system, but because officials want to ignore the fundamental concept that, just like the economy went down before, so shall it in the future times.

This article discusses steady economic growth in Uganda, namely 7% over the past 20 years. This has all been under the rule of Uganda's NRM party. In light of this week's discussion questions, this article does mention a cost resulting from the economic growth. That is that Uganda is now increasing its defense industry, which means increased violence.

This article has no direct correlation to supply side of an economy, as it mainly talks about Cypriot economy's bank crisis - credit crunch, predictions on GDP and changing patterns of banking (limitations to every-day withdrawals from ATMs). But the reason I chose this article is that they should aim at increasing the production side of an economy and so aggregate supply, shifting the LRAS curve to the right, and, in addition to that, structural reforms of the economy which overly depends on the banking. Particularly, Cyprus should undertake interventionist supply side policies, such as investments in infrastructure - roads, railways, harbours, airports and telecommunications all serve to lower production costs of all economic agents in a country. Or perhaps investments in technology and industrial policies which would increase the productive capacity of an economy.

This article truly scares you with all the facts about food. It is a pity how mass food production turns out to be 50% inefficiently allocated and at the same time huge consumer of water for growing the crops. If all food produced was adequately allocated, there would be probably enough food for all people and therefore it would be almost completely accessible for general public. At the same time also water could be consumed more effectively instead of wasting it for pointless excess in food production which turns out to be industrial waste. Water - meaning the drinking water was never a Common, however nowadays it all appears this situation is getting only worse and taking into account its fruitless use, some measures should be taken designed with sustainability in mind.

The article talks about the water demand of different countries and the different areas it is used for. This differes a lot from country to country. In some countries is used for agriculture and in others it is used for households or industry.

This article shows how the air in China is getting more polluted every year, and the population has only two choice: stay home or go around with a mask, hoping not to have any breathing problems. This connects with tragedy of the commons, since air is a common and people pollute it by using cars without thinking about the consequences. China is so populated, that the large use of cars is highly polluting the streets. In addition, there are industries that pollute and nothing is being done because air is a common.

This article highlights cuts in government spending in the US, specifically on airports and airlines. We know that government spending is a major component of aggregate demand. If government spending goes down, it is likely we will see a shift left in the aggregate demand. This is the result of about 10% fewer workers at any given time in the air transportation industry around the country. The article specifically highlights that this includes air traffic controllers as the decrease in them most affects consumers.

The article talks about topic covered already in the title, with some interest to the growth of industry of southern euro-zone countries and exacerbation of German and French production. So obviously, here I can refer to PPF where resources (also human capital) are being used more efficiently; here is the movement inside existing frontier or perhaps even outward shift with improved quantities and qualities of goods (especially capital). Nevertheless, economists still fear the euro-zone might fall in recession again if there are two quarters of consecutive fall (if the economy contracted). The market clearing price of many durable goods can be determined only to some extent, due to the presence of outside disturbance (fiscal and banking crisis - therefore always introducing new policies and bail-out deals). Another thing associated with the previous sentence and the article is the price mechanism (interaction of demand and supply) which allocates resources. Under unstable circumstances which are currently taking place in euro-zone, incomes are plummeting (falling GDP per capita) except for some particular periods of time when the economy meets actual growth, meaning that there is less demand leading to an inverse effect for producers. Normally, producers wish to supply more at higher prices, especially if income of people soars so they buy more of that goods. Therefore, higher prices do not present an incentive for producers to produce more. All the producers want to increase their producer surplus; but the trend is clear - towards maximized community surplus, since producers depend on consumers' utility.