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Kyuhwan L

How to Know When to Tax and When to Spend - 1 views

truth-out.org/...-when-to-tax-and-when-to-spend

business cycle government spending taxation recession prosperity

shared by Kyuhwan L on 03 Mar 13 - No Cached
  • Kyuhwan L on 03 Mar 13
     
    I really found this article interesting because it explains the strategy of taxation that aligns with the business cycle. It explains that during times of economic hardship, a recession, then government should increase spending to first "soft blow for businesses and average working people," but to also stimulate the economy and move on to recover. This is reflected by the Keynesian theory of economy, where the government intervention is necessary to put the economy back on the right track. On the other hand, the government should relax expenditure and slightly increase tax to pay off deficit. This strategy is also supported by history, where the article gives examples of past U.S. presidents and government decisions during different times of the business cycle.
  • ...1 more comment...
  • Andrzej Z on 07 Mar 13
     
    I agree with you that this article is very interesting. Like you said before it reflect the Keynesian school of economics. However, there is one problem with these theory, you don´t know if the government intervention are helping the economy or not. It is impossible to state which theory is better or if the economy work better with government intervention or without them. To investigate which one is better you would need two identic economies (this is impossible) in recession and intervene in one economy and in the other don´t make any intervention and expect that the market forces will solve the problem. "This strategy is also supported by history, where the article gives examples of past U.S. presidents and government decisions during different times of the business cycle." However the business cycle doesn´t affect all the economies in the same ways. For example the Spanish government is making a lot intervention but the economy is not recovering. On the other hand the biggest problem with the government interventions is that you can´t be sure in 100% about the effect of the intervention. You can study a lot the economy and prepar the intervention for months but you will know the result after the intervention, and the result may not be positive. The other problem with the government interventions is that many of them are not popular and many governments won´t risk losing popularity.
  • Benjamin D on 08 Mar 13
     
    I agree with what Andrzej said about the fatc that we don't what are the best ways to help the economy, either making a goverment intervention or not. The problem is that none of this policies are 100% efficient and the example that Andrzej gives us about the Spanish government shows us how sometimes intervention doesnt recover the economy.
  • Benjamin D on 08 Mar 13
     
    I agree with what Andrzej said about the fact that we don't what are the best ways to help the economy, either making a goverment intervention or not. The problem is that none of this policies are 100% efficient and the example that Andrzej gives us about the Spanish government shows us how sometimes intervention doesnt recover the economy.
Tisha D

Recession threatens Africa charities - 1 views

articles.cnn.com/...1_sub-saharan-africa-recession

business cycle recession Africa charities

shared by Tisha D on 07 Mar 13 - No Cached
  • Patrick vD on 07 Mar 13
     
    This article describes how the recession, the fall of GDP growth in the business cycle, affects not only the economy of one country, but also external economies will be affected and leads to negative externalities.
  • Tisha D on 08 Mar 13
     
    This article is about how the current recession is affecting the business cycle. It has had a toll on not only firms and businesses, but also on non profit organizations such as charities working in Africa. Currently, I would say that the business cycle is in one of the 'trough' points. This is because of the ensuing recession. However due to this, funds going to charities are now being cut off.
  • Max W on 11 Mar 13
     
    I think this is a very interesting article because you do not often hear about charities threatened by recession.
Matthew R

Royal Mail Putting itself Out of Business? - 1 views

dofonline.co.uk/...itself-out-of-business-3434543

demand price elasticity PED

shared by Matthew R on 16 Nov 12 - No Cached
  • Matthew R on 16 Nov 12
     
    Royal Mail has recently spiked their prices. This has resulted in a large decrease in number of stamps bought. A fall of 9% of mails have been sent with Royal Mail. They are certainly testing the elasticity of demand curve, but are they just putting themselves out of business? This article relates perfectly to price elasticity because this company, Royal Mail, is testing the elasticity of the market. They are taking a big risk, because if the elasticity is high, they may go right out of business. There are many free substitutes for sending mail, like E-Mail, Texting, and Social Networking. In my opinion, I think it is quite bizarre of Royal Mail to spike their price knowing that their demand has gone down. It will be interesting to see if they lower the prices again!
Jina K

UK services sector growth eases triple-dip recession fears - 0 views

www.guardian.co.uk/...r-growth-eases-recession-fears

business cycle output

shared by Jina K on 05 Mar 13 - No Cached
  • Jina K on 05 Mar 13
     
    The article talks about Britain's key services factor showing a growth in output. The purchasing managers index (PMI) shows an increase from 51.5 to 51.8. A figure above 50 suggests that the sector is growing.This pust away triple-dip recession fears as figures show a 0.3% decrease in Britain's economy for the last 3 months of 2012. Confidence has increased for service companies, which contributes to more employment of the sector. Some economist suggests a brighter economy growth in March, but some economists are still reluctant to believe, stating that a triple-dip recession is still possible. This relates to business cycle as we can notice how several factors can contribute to the business cycle. Here, we can see that output for service facts are increase, though contradicting to output in manufacturing and construction factor. Service sector is the biggest of Britain's sector. This suggests that Britain is still in a recession or possible a trough. It has probably reached its lowest point, but hasn't yet emerged to a full recovery just yet.
Benjamin D

Economic recovery weak in November: BluFin Business Cycle Indicator - 0 views

articles.economictimes.indiatimes.com/...mic-recovery-recovery-path-bci

'Business cycle'

shared by Benjamin D on 07 Mar 13 - No Cached
  • Benjamin D on 07 Mar 13
     
    This article talks about how the recovery in the economic growth in India has weakened after three months of straight-increase, however the economic growth of India remains positive. This situation has been manly caused by the fact that there has been a slowdown in consumer sectors and investor demand and mantaining the confidence for these two would be essential to ensure a sustained economic growth. The BluFin Business Cycle Indicator (BCI), aims to meet everthing of the business cycle, and took into account five areas -- capital markets, foreign trade, policy, real economy and survey to determine and measure this situation
Jean Eric

Recovery signs: PSU banks to hire 56,500 jobs in next 6 months - 0 views

articles.economictimes.indiatimes.com/...anks-psu-banks-state-run-banks

business cycle

shared by Jean Eric on 07 Mar 13 - No Cached
  • Saskia vK on 07 Mar 13
     
    Public sector banks, from State Bank of India to Allahabad Bank, will hire as many as 56,500 people in the next six months in the highest ever recruitment drive by the industry in more than a decade as business grows and the threat of new banks looms as the Reserve Bank of India plans to issue new licences soon. The recruitments by more than a dozen banks will be 30% higher than last year's numbers as hopes of business cycle turning for the better grow, bankers said.
  • ...1 more comment...
  • Max W on 07 Mar 13
     
    This article talks about the public sector banks, from State Bank of India to Allahabad Bank and that they will hire many people over six months.
  • Jean Eric on 07 Mar 13
     
    This article talks about the Indian Private Sector Banks planning to hire more than 56500 people to work for them in the next 6 months, essentially creating 56500 jobs. It would be the highest recruitment of jobs in more than a decade and would help solve the economic crisis. It states that the recruitments by more than a dozen banks will be higher 30% higher than last years. What we can see here is the trough of the business cycle where the economy cannot get any worse, so therefore it will improve. India made the important leap of changing from the contraction area of the curve to the expansion area where Real GDP will grow !
  • Benjamin D on 08 Mar 13
     
    This is a rather intersting article as it shows us how the industry in India is growing and how this has given jobs to that incredible amount of people. I agree with your point that the economy can't get any worse, thus there will be improvements when it reaches a certain point and therefore the real GDP wil grow.
Seyeon O

The Economy's Being Blamed for the Decline of Pet Burials - 0 views

business.time.com/...emeteries-and-pet-burials-over

YED

shared by Seyeon O on 13 Nov 12 - No Cached
  • Seyeon O on 13 Nov 12
     
    Income Elasticity of Demand This article explains about pet burial business suffering because of economic recession. The business' revenue dropped from "$47.7 billion" to "$45.5 billion" within one year in the United States. The article claims, its' revenue dropped because of recession. This article is good example of how knowing Income Elasticity of Demand (YED) can be used to predict the economy of the country. Considering pet burial is luxury good, it has very high YED. The decrease in quantity demanded of the product indicates the general income of the country decreased.
Andrzej Z

Spain digs deeper into recession, not out - 0 views

www.eleconomista.es/...er-into-recession-not-out.html

business-cyle Equilibrium supply demand worldwide

shared by Andrzej Z on 28 Feb 13 - No Cached
  • Andrzej Z on 28 Feb 13
     
    It is an article about the recession and unemployment in Spain. The unemployment is a very serious problem in Spain because the rate of unemployment is about 25% or more so is a lot. This article report that the Spanish situation is stabilizing but we can´t assume that is the end of the recession and the start of the new business cycle. The business cycle is the periodic fluctuations in economic activity measured by changes in real GDP. Output cannot continue to fall for ever as there will always be some people with jobs to maintain a given level of consumption, foreigners will demand exports, governments will continue to spend by running budget deficits, and people will be able to use savings to finance their consumption. Additionally, the low demand for money for investment will result in lower interest rates. Thus, aggregate demand will pick up, the economy will enter the recovery phase, and the cycle will repeat itself. So after the recession the national economy of Spain will suffer an economic growth, the amount of the goods and services produced by an economy over time will increase.
Caitlyn S

In This Recovery, the Rich Get Richer - 2 views

billmoyers.com/...s-recovery-the-rich-get-richer

business cycle income-inequality

shared by Caitlyn S on 08 Mar 13 - No Cached
  • Caitlyn S on 08 Mar 13
     
    The article discusses how during recessions, the rich become richer and how the businesses cycles still disadvantage the poor and benefit the rich. During recessions, income inequality increases and favors those who are wealthy. As unemployment rises, many people see a significant decline in their income and saving abilities. They are no longer able to afford common resources. For example, people will need to sell their business, houses… This leaves the rich buy up such resources for a cheaper price. This is what keeps the rich constantly "on top" and the poor even poorer. There is a chart which really illustrates this statement put forth by the author.
  • Max W on 11 Mar 13
     
    I think it's funny to see how rich people can get even richer during recession.
  • Jean Eric on 13 Mar 13
     
    This article talks about how the top 1% doesn't get affected by recessions and actually gets richer while the poorer get poor. This came as a surprise to me as I thought recession always had a negative effect on the incomes of the population, but obviously this isn't true. The article states since the recovery period of 2009, the bottom 99% of workers incomes decreased by 0.4% while the top 1% workers income raised by 11.2%, an enormous amount during a recession. In my opinion I think this might be because of the increase in black market activity during a recession, due to the fact that the richest people in the world have earned their income, one way or another, through illegal activity.
Jina K

German economy to pick up this year: economy ministry - 0 views

www.reuters.com/...-economy-idUSBRE91A09B20130211

macroeconomic activity contraction GDP unemployment

shared by Jina K on 11 Feb 13 - No Cached
  • Jina K on 11 Feb 13
     
    The article talks about the overall German economy. The economy ministry states that although there is weak development in industrial output to the point where there is contraction the GDP during the fourth quarter of 2012, there are many signs that indicate the growing economy. He states that the economy has reached its lowest point already. The country sees a growth of 0.8 percent in industrial orders as there is an increase in euro zone. Furthermore, many surveys indicate that many businesses, investors, and consumers are becoming more optimistic. Data has shown that there is increase in exports, international trade, and as well as a decrease in unemployment. Contribute by a narrowed US trade deficit indicates an increase in global demand. This article can be related back to the business cycle. As you can see, by description, German's economy is in a trough phase and with evidences indicating that it is leading towards the recovery phase. This shows that there is a lowest point in the phase where the economy can not get any worse. There is a point that there is still consumption. We can also see that during the recession, GDP decreases, aggregate output decreases, aggregate demand decreases, and unemployment increases. This clearly reflects the business cycle.
Mariya L

France Tries to Tempt In More Foreign Investment - 1 views

www.nytimes.com/...frances-doors-to-business.html

France Foreign Direct Investment

shared by Mariya L on 25 Feb 14 - No Cached
  • Mariya L on 25 Feb 14
     
    PARIS - President François Hollande of France has begun a major charm offensive to convince the world that France is open for business in a bid to lure back investments, which have slumped since he took office. In this article author talks about the measures taken by the president of France François Hollande. Recently he has gathered chiefs of the largest multinational companies and investment funds to speak about the needs of France in the investments. He has admitted that France may appear as a country with some complexity in the process of investment, however, France is ready to open itself up. Article also talks about some other aspects one of them is the measures taken by the government related to government spending and taxation.
Mariya L

Excise tax on your phone bill may be on way out - 0 views

usatoday30.usatoday.com/...2005-06-30-taxes-usat_x.htm

phone excise tax Spanish-American war

shared by Mariya L on 18 Nov 12 - No Cached
  • Mariya L on 18 Nov 12
     
    In this article author talks about excise tax and specificly about excise tax that was imposed in 1898 and survived till nowadays. The purpose of that taxation was to pay for the Spanish-American War. The war was over in 6 months but tax stayed. The amount received from taxation was about $300 billion, and the amount spend on war was $6 billion. This tax is very unfair to customers, "This is a 19th-century tax on a 21st-century technology," says Jim Cicconi, AT&T's general counsel. The original purpose of the tax was to raise revenue for a specific purpose, and to do so in a way that would not be noticed by the average consumer. Today, the purpose is gone, and consumers are definitely feeling the pinch. Businesses and consumers pay the same: 3% of the total. On a $100 phone bill, that works out to $3. On a $10,000 bill - not uncommon for businesses - the tab is about $300. Another important fact pointed in that article is that phones were luxury during XIX century, but now they are almost necessities. Seven federal courts have so far declared the tax to be illegal.
Andrzej Z

A Government Imposed Disaster: Price Controls in the Wake of Sandy - 0 views

www.huffingtonpost.com/...nt-imposed-disa_b_2077734.html

control price demand supply scarcity government

shared by Andrzej Z on 23 Nov 12 - No Cached
  • Andrzej Z on 23 Nov 12
     
    This article talk about the maximum price in New York and New Jersey after the sandy huracane. The government has set new laws in order to reduce the price for the neccessity products. However those laws are causing shortages in New York and New Jersey. Government-imposed price controls are making the disaster worse a week after Sandy hit shore. The producers can´t increase the prices for goods considered neccesarie for the consumers.The businesses aren´t allowed to raise their prices more than 10 percent within 30 days of a declared state of emergency. If the businesses increase above the maximum prices they will have to pay penalties. When there is a situation of scarcity (shortage) the people will try to buy the products in the black for a higher price. When high prices are prohibited from serving their function the result is a shortage where there are more buyers than sellers. Buyers still compete with other buyers to try to get the scarce gas, but because price competition is illegal their competition takes less beneficial forms.
Patrick vD

Rattling the supply chains - 0 views

www.economist.com/...tain-fallout-diplomatic-crisis

aggregate supply

shared by Patrick vD on 28 Feb 13 - No Cached
  • Patrick vD on 28 Feb 13
     
    This article talk about how the Anti-japanese riots in China attack Japanese suppliers. If you take Japanese cars, people in China will be less likely to buy a Japanese car, because due to the riots, they will be assaulted and destroyed. This will lead to a decrease in the aggregate supply of these cars in China, since suppliers know that people will be less likely to buy these cars during the riots.
Caitlyn S

Youth unemployment hits 1 million - 0 views

www.guardian.co.uk/...youth-unemployment-hits-1m-uk

youth-unemployment inflation unemployment

shared by Caitlyn S on 14 Mar 13 - No Cached
  • Caitlyn S on 14 Mar 13
     
    UK unemployment has risen to 1.2million, resulting in a youth unemployment rate of 21.9%. The british government, which insists the deterioration in the jobs market are due to the eurozone debt crisis, have been criticised for ignoring domestic problems . "Overall, the rise in unemployment and weakness of earnings growth relative to inflation continue to place substantial pressures on household finances - squeezing real incomes, suppressing confidence and leading to increased precaution among consumers. This can only be bad news for economic growth in the short-term." said Scott Corfe, senior economist at the Centre for Economics and Business Research. Government's work programme and work experience schemes have been created in attempt to is get a significant number of young people off benefits and find exmployment.
Caitlyn S

USA - 0 views

articles.washingtonpost.com/...y-global-economy-weak-recovery

fiscal-policy

shared by Caitlyn S on 18 Apr 13 - No Cached
  • Caitlyn S on 18 Apr 13
     
    The United States remains desperate for faster growth and stronger job creation as it continues its slow recovery from the 2009 recession. Peter Blair Henry, the dean of NYU's Leonard N. Stern School of Business states private investment is falling $1 trillion short per year due a to disputes over the "fiscal cliff," the federal borrowing limit and other issues." Monetary policy and fiscal policy are working at "cross purposes" - one is expanding while the other contracts." Governments should save money during times of economic prosperity and spend it to boost the economy when growth decreases. Lawmakers should prioritize predictability in policymaking to trigger private investment and government investments, particularly in education, should be off-limits to cuts. Henry points out that a solution to closing the wage gap is to produce more skilled workers. Raising taxes on the highest tax bracket may also be part of the solution to overall sustainability concerning the fiscal side, but not a solution for income inequality.
Kyuhwan L

Income tax hikes will likely fail to solve B.C.'s budget problems, report suggests Rea... - 0 views

www.vancouversun.com/...story.html

tax fiscal policy revenue deficit

shared by Kyuhwan L on 13 Apr 13 - No Cached
  • Kyuhwan L on 13 Apr 13
     
    The British Columbian government has stated in its newest budget a tax increase for incomes over 150,000 dollars and a permanent 1 percent increase for corporate taxes. In the 1990s, the NDP government has implemented a similar tax hike in the hopes of increasing revenue, yet the opposite happened as the rich found ways to evade taxes and even worse found no incentive to work harder. However in 2001, the liberal party slashed taxes and revenue slowly, but surely increased. It is a period of waiting as the new tax increases take effect and to see if past still holds true, or if the future will be brighter.
Mariya L

U.S. Manufacturing Slows - 0 views

www.nytimes.com/...us-manufacturing-slows.html

economic_growth US March_2013

shared by Mariya L on 01 Apr 13 - No Cached
  • Mariya L on 01 Apr 13
     
    The economic growth in the US has been slowed down in the past month. Overall in March, the rate of new orders dropped causing the fall of national factory activity to 51.3 from 54.2 that occurred in February. A reading above 50 indicates expansion in the manufacturing sector, and a number below 50 means contraction, thus despite the fact that the index fell, there is still expansion in factory activity but it had a lower rate in March. Altogether, new orders index, prices-paid gauge, inventories fell, while the employment improved.
Andrzej Z

Korea Per-Capita GNI Hits Record High in 2012 - 2 views

english.chosun.com/...2013012900991.html

worldwide economics politics money GNI macroeconomic-activity

shared by Andrzej Z on 07 Feb 13 - No Cached
  • Andrzej Z on 07 Feb 13
     
    I like this article because it is very short and it is related to the topic of this week. It is about the GNI in Korea. The GNI is the growth of the national income, consists of: the personal consumption expenditure, the gross private investment, the government consumption expenditures, the net income from assets abroad (net income receipts), and the gross exports of goods and services, after deducting two components: the gross imports of goods and services, and the indirect business taxes. The GNI is similar to the gross national product (GNP), except that in measuring the GNP one does not deduct the indirect business taxes. The GNI of Korea has experimented a very high grow this year, it is almost the double of the GNI from the year 2002. The nominal GNI from the last year was $118.7 billion, this information is based on the assumption that the country's nominal GDP expanded by 3.2 percent.
Jean Eric

It's the Aggregate Demand, Stupid - 0 views

economix.blogs.nytimes.com/...ts-the-aggregate-demand-stupid

'agregate demand'

shared by Jean Eric on 17 Feb 13 - No Cached
  • Caitlyn S on 17 Feb 13
     
    Currently the Obama administration is talking about finding new ways to create jobs and stimulate growth. However, it has proved to be unsuccessful, as the only policy that will really help is an increase in aggregate demand. The article explains that aggregate demand simply means spending: "spending by households, businesses and governments for consumption goods and services or investments in structures, machinery and equipment." At the moment, businesses should not to invest because there is lack of consumer demand. The federal government could increase aggregate spending by directly employing workers or undertaking public works projects yet this proves to be difficult. The author explains that the most important thing is for policy makers to stop focusing on debt and attempt instead to raise aggregate demand.
  • Jean Eric on 19 Feb 13
     
    THis article talks about how the recession has effected America and what America really needs is an increase in aggregate demand. That is the increase in consumption, investments, exports etc. They say that a direct solution to increase aggregate demand would be an increase in aggregate spending by employing citizens in public projects controlled by the government and if that isnt enough then its all up to the citizens. It then talks about how consumer confidence significantly effects spending. that is if house holds feel that they are rich, then they dont feel the need to save and as a result of that they spend the money they were going to spend and vice versa.
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