tag:blogger.com,1999:blog-8764541874043694159.post4934703519356295052..comments2024-03-19T07:27:21.299+00:00Comments on Coppola Comment: Structural destructionFrances Coppolahttp://www.blogger.com/profile/09399390283774592713noreply@blogger.comBlogger8125tag:blogger.com,1999:blog-8764541874043694159.post-1020012021672366312014-12-01T18:23:01.356+00:002014-12-01T18:23:01.356+00:00London is always bashing the EU. In my opinion, wh...London is always bashing the EU. In my opinion, what they're really saying is, don't burst our debt bubble. If the EU goes forward with GOMO, London will be a shit heap!Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-85430211797582995022014-12-01T06:55:56.804+00:002014-12-01T06:55:56.804+00:00Let me try it this way.
Can real AS go above real...Let me try it this way.<br /><br />Can real AS go above real AD without there being a demand shortfall or a negative demand shock?Fed Upnoreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-55258304416788148322014-11-30T21:43:01.783+00:002014-11-30T21:43:01.783+00:00You mention both monetary and fiscal policy. They ...You mention both monetary and fiscal policy. They certainly work together.<br /><br />I have been working on a monetary model that I call the Fiat Decay Model. I think it provides an improved visibility of fiscal action. A graph comparing transactions calculated by the Fiat Decay Model and standard velocity of money can be found at <br /><br />http://mechanicalmoney.blogspot.com/2014/11/finding-exponent-in-fiat-decay-model.html<br /><br />Please scroll down past the math [that explains how the exponent (the number of transactions) is found] and look at the graph. The graph shows periods of above average numbers of transactions (and velocity) which seem to me to coincide with better economic activity. The graph also clearly shows that both annual transactions and velocity of money have been falling for a long time. I believe the above average transactions are the result of above average private activity influenced by fiscal polity.<br /><br />The FD Model shows the effects of fiscal policy by emphasizing transactions of money as money passes through a tax exposure. <br /><br /><br />Roger Sparkshttps://www.blogger.com/profile/01734503500078064208noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-26932525662356710962014-11-30T18:32:16.994+00:002014-11-30T18:32:16.994+00:00There's a methodological problem with these do...There's a methodological problem with these dotted line "trend growth" estimate. In boom periods the trend includes an ever increasing contribution from negative net value activities that get booked to GDP but are not sustainable. One of the function of recessions is to clean out those (and arguably some other things, it's not perfect). So is the assumption that trend growth is this dotted line valid?<br /><br />Why are the unemployed youth not rioting? Maybe they're too busy working? Official numbers show the number who get unemployment benefit. This is not the same as people who don't work. Southern Europe has a thriving informal sector, which, while obviously not perfect (lots of badly paid precarious jobs, inefficiencies of scale, low unionisation) does make the situation not as bad as the same numbers would be in Northern Europe.<br /><br />Moreover some of the "rioting" went through the ballot box in voting as seen in the performance of UKIP sister parties and other fringes. Arguably burning a few cars may have been a better idea.<br /><br />There's also the student issue: some commentators have suggested (some of) the Spanish youth responds to such crisis by studying longer thus making the unemployed look bigger (as the total active population in that age class is smaller than it would otherwise be). One could wonder if the UK has not seen the reverse effect: highly employable youth joining the jobs market earlier due to being explicitly charged for higher education thus making the structurally unemployed look smaller. Longer term effects of more education in Spain and less in the UK (if the hypothesis is correct) may not be so nice. BTW Frances, it may make a good subject to cover: has the UK university funding revolution caused fewer (indigenous) people to study, or study less? I don't know what the answer is, though basic theory says when the cost of something is high OR more explicit, demand goes down.<br /><br />I'd be curious to know how the OECD is coming up with those estimates NAIRU (a notoriously unobservable number). If someone wants to take the other side of a derivative that pays off (to me) if the OECD is wrong -- hitting those numbers doesn't cause material inflation -- I'd be interested.cighttp://commentisglee.wordpress.com/noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-59991891487937346492014-11-30T18:02:25.061+00:002014-11-30T18:02:25.061+00:00Newcastle just isn't the same thing as London....Newcastle just isn't the same thing as London. Should the currency union they're in be dissolved?cighttp://commentisglee.wordpress.com/noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-92144122890109039412014-11-30T13:44:09.672+00:002014-11-30T13:44:09.672+00:00An additional and important reason for poor EZ per...An additional and important reason for poor EZ performance is that it is trying to deal with disparities in competitiveness as between Germany and the periphery by imposing deflation on the periphery. Thus the problem in the EZ is to a significant extent one that is inherent to common currencies. At least they’re trying to impose a common currency on countries which are very different in nature: e.g. Greece just isn't the same thing as Germany.Ralph Musgravehttps://www.blogger.com/profile/09443857766263185665noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-54640785745907249252014-11-30T11:42:08.379+00:002014-11-30T11:42:08.379+00:00No. I should perhaps have added a link to my lates...No. I should perhaps have added a link to my latest post at Pieria, which discusses the global demand shortfall and the paucity of measures to address it. The 2008-9 crisis was a negative global demand shock which has had serious supply-side consequences in advanced economies. That's what the charts show. Frances Coppolahttps://www.blogger.com/profile/09399390283774592713noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-49919654683894403032014-11-30T05:33:21.832+00:002014-11-30T05:33:21.832+00:00"This set of charts shows the effect of the 2..."This set of charts shows the effect of the 2008-9 recession on real GDP trend growth for four economic areas - the US, the UK, the Euro area and Canada:"<br /><br />Are you assuming real AD is unlimited?Fed Upnoreply@blogger.com