ibeconomics

This article relates to the recession and abrupt rises in home sales. This surprised me, as industry is taking long to recover in some areas, and home sales have been a primary trigger for the recession in the first place. This article also underlines that there were other factors influencing the growth, namely the first-time buyer tax credit. What will the effects of this be on the long run? and will home sales continue to grow at such a rate when tax credits are reduced? Also, what do you think are the reasons for growth in home sales in the first place not taking into account the buyer tax credit? Other countries' home sales are still struggling while at the origin of the debacle sales are booming? What led to this recovery? Loads of questions :P

Good job finding this article Theo. I've given you a bonus mark. It's interesting reading how DeBeers has actually withheld their diamonds to keep the prices up. Thanks.

Wow. Who knew diamonds could be such an interesting industry! Did your source in Antwerp give you any indication of why firms thought that was a good idea? I wonder if they are afraid DeBeers will buy them all if they don't and keep moving the prices higher? Ceteris paribus this is not!

Well in the industry the diamonds that are needed are extremely different from industry to industry and one company to the next. They need very particular diamonds with specified charcteristics in the range of categories diamonds are sold in. Diamonds that are for sale in jewlerry stores are particular to the demand of customers with least colour and most clarity. Due to this demand, the price of these particular diamonds is extremely high. The demand in industry is also specific, though subject to change due to innovation, hence prices for particular industrial diamonds would be extremely high IF the sellers would know what the industry needed. To prevent this from happening, the industry buys a wider range of industrial diamonds to keep their actual demand secretive and prevent prices from rising. This behaviour is becoming more extreme due to the uncertainty in the diamond market currently. I only understood half of what i was told really and even these gigantic sellers are cannot understand the whole workings of the industrial diamond market which is apparently handled with great secrecy and care. I really hope this made sense though :P

Also, a rise in interest rates means that the government is trying to slow down economic growth. This is because when the rates are low people can borrow money cheaply and invest in things, like new machines for their business or whatever. Exchange rates are a bit trickier. What you say Thomas is right, but the reasons for this are a bit complicated. The main effect of the interest rate rise is a slowdown of growth because people have less money that they can spend. However, a bit ironically, an increase in interest rates actually means that the economy there must be doing really well. They wouldn't dare raise the rates in the US at the moment.

I like the article and how it relates to the demand of customers and reflects their situation, but I cannot find where it says the farmer "lowered" his price, it only mentions it waslower than others...it also says that those turkeys selling for more are also selling well. It's a good article though :) especially on thanksgiving.

So this is article is saying that while the use of mathematics and mathematical models in economics is quite effective that today's economists have ceased to be able to explain the unpredictability of the world and its economy due to their reliance on mathematics. So due to the fact that this movement of using mathematics to explain the world economy has lead to be the dismissal of things that cannot be explained by utilizing mathematics, and that in the aftermath of the recent economic breakdown people have realized the economists of today cannot explain most of the economic forces at work today? In this article the author thinks all work in economics for the past twenty years or so has been very inefficient at explaining the world economy and thinks a wave of new ways of thinking is the only way the economics can resume it role at explaining the economy. Do you think that going back to the ways of men such as Keynes and Smith would be beneficial or that to be able to explain the world economy on needs to rely on the rigor of mathematics solely?

if this would become reality in Russia that would be great... Transparency of governments is also a topic on the UN agenda and in its basis also very herlpful to the population, however considering Russia's history (as well as Histories of many other countries) there is still a long way to go to achieving transparency. The idea of freedom depends entirely on one's definition of it. The GDR for example may have called their nation "free" while its citizens were not aloud to freely leave the country. In addition there are many different types and interpretations of freedom reaching from religious freedom to freedom of speech. Complete freedom of press is nonexistant in modern society and has in countries like Russia been doubted numerous times. This doesn't mean that freedom cannot be achieved, but it isn't easy. I like Medvedev's word choice though and his ideology seems good for Russia's economy. I especially like the emphasis on a "smart" and intelligent economy with fresh input instead of the old paths.

"We've got a problem with terminology because we usually say either the economy is in recession or the economy is recovering. Either you're in hell or you're in heaven. And the trouble is we're actually in purgatory. We're actually in a situation almost for sure GDP is growing; almost for sure the business cycle leading committee will eventually decide the recession ended this summer. But almost surely also we're still losing jobs. The unemployment rate is going to continue to rise. So we're in that infamous jobless recovery state. "