Group items tagged

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.

I think it's funny to see how rich people can get even richer during recession.

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.

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.

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.

I think this is a very interesting article because you do not often hear about charities threatened by recession.

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.

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.

In this article the author talks about the slow down in the economic growth of 16 leading emerging markets. Earlier compare to the Eurozone countries, UK and the US, the economic growth of those 16 countries was far higher. After this short period of stagnation, the world economists ask whether the growth, which depends a lot on exports, will increase or not. It weather will "wobble along, buffeted by worries in the developed world"; or temporary stop and then "bring back the days of the strong growth". Right now, the world economy is in the state of the recovery, in the past it went through the recession that started in 2008 and the trough. The fall in indicators mostly stopped, and the economic health very slowly continues to recover from the past.

"The index covers 16 leading emerging markets, including India, Brazil and China, which all saw their rate of growth fall. Rates of economic growth in these countries have been far higher than in developed nations, often coming in at about 10% a year." I think that the author is trying to say that Brazil in China have the highest rates of economic growth and not UK and the US. The exports in these two countries are very important; China is the country which more products export in the world. Their economic growth is slowing because of the recession in the other counties where the consumption has decrease and the people try to save money so the imports of products from China is not so high as it would be in a period of economic growth in all the world. I think that only in few countries the economy started to recover from the recession, in most of the economies are in stagnation. This suggest us the probably the worst part of the recession is behind us and the economies will start to recover, however these fluctuations in economic activity do not follow a mechanical or predictable periodic pattern so we can´t be sure when the recovery will start.

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.

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.

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.

The article does not talk about the whole aggregate demand, but rather focus on one component that contributes to aggregate demand. The article talks mainly about exports in Spain, contributing to its nation's economic growth. Spain's exports figures have increased despite the recession phase. The exports have broke a record of the least trade deficit since 1998. Exports increase to 222.6 billion euros in 2012 from 215.2 billion euros in 2011, which is the highest exports since 1971. Spain's trade deficit decreased 34% as imports fell 2.8%. This is due to changes in exchange rate and improvements in competitiveness. Apart from that, measures like labor law changes have improved investors' confidence.

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.

According to this article, the recession has induced Americans to reevaluate their spending and adopt cost-saving strategies such as using coupons or taking advantage of sales. Many people have reduced the amount of money they spend, over the last couple of years, especially those who have incomes of under $45,000. "The consumer mindset has changed (…) they've become used to being careful about what they buy and where they buy it." However, while price is a major factor, consumers said that quality was still a top priority. The article indicates that there are certain items that consumers will not go without: The first item on the list was animal protein: 10 percent [of consumers] said they refuse to give up meat, poultry, fish and seafood. Also, 8 percent saying they would not forgo alcohol, tobacco; coffee, tea; milk, juice, or household and laundry supplies. As expected, "38 percent say they're purchasing less clothing and 20 percent said they're buying less expensive brands." Therefore, items such as proteins, alcohol, tobacco, coffee, tea, milk, juice, and household supplies are relatively inelastic goods with regard to income. On the other hand, clothing is an inelastic good during this recession.

This article talks about how the unemployment is affecting the United States and how it is related to a decrease in the aggregate demand of the country. And how this possibly causes the real GDP being 6 percent under the trend path.

This article tells us how the recession in the United States has affected the unemployment rate; people consume less thus the aggregate demand is lower and remains like this as unemployment increases. I also found important something that is mentioned: "During a deep recession, more workers move into the category of those who take a long time to find new jobs, and so the decline in unemployment across the labour force as a whole is quite slow" Factors mentioned in this article are what determine the real GDP to be 6% under the trend path.

This article talks about the possibility of deflation in the US. Deflation would be a problem for a number of reasons: first, deflation would make it more difficult to engineer an economic recovery; second, deflation could result in a "death spiral" like what happened (according to one interpretation) during the early 1930s. This article suggests that unlike times of good economic state, the policy that should be taken during a crisis should be decreasing supply instead of increasing it, this would be the easiest way to stop deflation.

This article relates directly to the concept of income elasticity of demand and cross elasticity of demand . McDonald's monthly sales fall for the first time in almost 10 years. Its revenue fell by 1.8% last month. This happens because of the various reasons. One results from the unstable economy. People are more cautious about spending their money. A lot of people choose to "eat in", simply because they cannot afford it. This applies a lot to the younger consumers, who have been facing unemployment. The company has also been affected by Europe's economy since the market of Europe counts for 40% of the company's revenue. European economy has been facing recession. There has been a tremendous amount of unemployment, which means a decrease in the general population's income. This directly relates to income elasticity of demand. As income falls, the quantity demanded for products fall as well. In this case, people choose to eat at home to be more frugal. I believe this contradicts a little to the idea of inferior goods. McDonald's may be considered as "inferior goods" to the majority. It is often said that as income decreases, inferior goods will likely benefit from it. However, in this case, McDonald's do not. People choose other alternatives instead, which is eating in. So it is just not McDonald's that has been affected, but a lot of other restaurants and fast food chains too. Furthermore, fierce rivals have also came up with strategies to out compete its competitors. For example, Wendy's Co. has decided to upgrade their menus and offer discounts. This relates to cross elasticity of demand. Obviously, as other rivals offer discounts and as well as an upgrade on their menus, consumers will shift to consuming those products that are slightly cheaper.

In this article, the author talks about the Bank of England. Because of the recession, Bank of England tried to stabilize the state of the economy. So it has kept its stimulus programme of quantitative easing (QE) unchanged and also held interest rates at 0.5%. Quantitative easing is is an unconventional monetary policy used by central banks to stimulate the national economy when standard monetary policy has become ineffective. A central bank implements quantitative easing by buying financial assets from commercial banks and other private institutions, thus increasing the monetary base. The first quarter GDP figures, showing growth of 0.3%, were also felt to have reduced the need for more QE. Also, industrial output rose 0.7% in March from February, a bigger increase than forecast. Manufacturing output rose by 1.1%.

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.

Like the name of the article, the author talks about the problem after the recession: unemployment rate is high still, when job vacancies are more. This is quite a confusing and unexpected situation. It doesn't make any sense when there are many opening job opportunities, there should be less jobless people. Even though the reason which causes this issue is not clear, the author hypothesis is that there are probably some mismatching skill for the job, or we can call it structural unemployment; or it must be the firms are afraid of making hiring mistakes since the economic conditions is still uncertain.

What this article talks about is the two points of view, which are completely different in nature, to why the US economy is failing. The one point of view is that there is too little aggregate demand and an excesive supply of wasted potencial. The other view is that there is too much government intervention. It talks about how the recession has effected investments and aggregate demand and therefore decreased the average wages of the country. The article states that a solution to the problem would be the fiscal policy where the governmnet would lower percentage taxes in order for the rich to start investing again. This would then promote the recovery of the economy.

I found a similar article today in a Spanish newspaper and I decided to blog it in bookmark because it is about economics and politics. So I looked for the same article in English and here it is. It is very interesting because it is short, concrete and very actual. It is about Mariano Rajoy, talking about the recession. He thinks that is very important to be united, coordinated and that Countries that can afford stimulus policies should implement them, while other nations should focus on reducing their budget deficits. Also he said that is very important that the Latin countries must avoid protectionist policies. I wonder how the conference in Santiago will end because they will determine the future economic policies.

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.

According to the article economy finally passed the recession and now demand for houses rises again. Near record low mortgage rates, rising home prices and a drop in foreclosures have combined to bring buyers back to the market. Right now the supply of houses is very low, there is nothing to sell, while the demand keeps growing. That change won't lead only to increase in jobs in the housing sphere, but also in the furniture, appliances, and other manufactures. But despite that fact, economists still predict only a modest rise in the overall economy this year.

Canada's economy seems to have taken a hit as housing, jobs and exports fell. First there was a 21,900 jobs loss in January plus a 58,000 decrease in Canadians looking for work. In addition, exports fell 2.1%, exports to the US alone dropped, 4 points and imports fell as well. Furthermore a 19% reduction in the housing industry topped Canada's misfortune these past 2 months. Many Canadians are questioning the actions of the conservative government as economic growth is slowing to a crawl.

I think that you have chosen a very nice and interesting article because it's related to our actual topics. Is a good example about the importance of the exchange rates in the exports. If a country's exchange rate becomes stronger, then this makes the country's exports relatively more expensive to foreigners. According to the law of demand, this will cause the quantity of exports to fall. Another think to highlight is the increase of the unemployment rate, this will probably decrease the consumption because However, if people expect economic conditions to worsen then they are likely to reduce their consumption today in order to save for the future. In brief i think that it's a great article to talk about the aggregated demand, macroeconomic and the monetary policies.

I find this article particularly interesting because i never knew that Canada was suffering so much from the recession. Since it states in the article that 21,900 jobs were lost means that the household cinsumption must be very low a resulting in a low agregate demand, and since the agregate demand is low firms gain less proffit and therefore have to cut costs which in this case would be workers.