tag:blogger.com,1999:blog-2546602206734889307.post4311495376965369454..comments2024-03-18T11:12:51.114+00:00Comments on mainly macro: The influence of macroeconomic ideasMainly Macrohttp://www.blogger.com/profile/09984575852247982901noreply@blogger.comBlogger10125tag:blogger.com,1999:blog-2546602206734889307.post-64431514015887733592015-04-11T09:45:06.151+00:002015-04-11T09:45:06.151+00:00This comment has been removed by a blog administrator.Model Rumah Minimalis Type 45http://www.desainrumahminimalistz.com/318/gambar-model-rumah-minimalis-type-45/noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-47593140977307480532012-10-12T14:58:35.368+00:002012-10-12T14:58:35.368+00:00The more people save, the lower the real rate of i...The more people save, the lower the real rate of interest, which results in increased investment. All that happens is the investment goes into higher order goods, rather than consumer goods - which is good for the economy.<br /><br />There are three types of companies - mature firms, emerging firms and cyclical firms. Mature firms are SUPPOSED to save. They save not in corporate vaults but in banks. Banks lend to emerging firms. Emerging firms use the borrowed funds to expand, which means buying capital goods from cyclical firms, which in turn borrower to finance their own expansion. And mature firms ARE saving - and the banks ARE lending: but they are lending to the government. What's going on is not a "paradox of thrift" at all but a simple crowding out of the private sector by the public sector.<br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-10726994521416026612012-06-27T06:54:09.857+00:002012-06-27T06:54:09.857+00:00This comment has been removed by a blog administrator.David Hudsonhttps://www.blogger.com/profile/16674544381235671192noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-16818051338628134992012-06-27T06:11:47.827+00:002012-06-27T06:11:47.827+00:00This comment has been removed by a blog administrator.Shenzore Wildeshttps://www.blogger.com/profile/15686637219025855403noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-48830440372688581362012-06-27T05:37:55.755+00:002012-06-27T05:37:55.755+00:00This comment has been removed by the author.David Hudsonhttps://www.blogger.com/profile/16674544381235671192noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-4283654129584819502012-06-25T10:31:25.963+00:002012-06-25T10:31:25.963+00:00This comment has been removed by the author.Shenzore Wildeshttps://www.blogger.com/profile/15686637219025855403noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-78931630208423309492012-01-23T21:18:17.990+00:002012-01-23T21:18:17.990+00:00Does the fact that you and almost 100% of UK acade...Does the fact that you and almost 100% of UK academic economists are employed by the state make you all free of pro-state, pro-intervention bias? I don't think so. You are proud of your work for the UK Government, for others it must make us very wary of your unconscious bias.James Alexanderhttps://www.blogger.com/profile/12052486292054993368noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-79757590034604335512012-01-21T17:41:22.483+00:002012-01-21T17:41:22.483+00:00Here in America your first factor does not exist. ...Here in America your first factor does not exist. Civil servants are not seen as a source for any policy advice. Political appointees occupy all senior policy posts in all agencies. They are, of course, chosen because they agree with the administration view of the world.<br /><br />It is rather frightening to think about which economists a President Gingrich would choose for his policy advisers.Charles M. Smithhttps://www.blogger.com/profile/01959827594590116446noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-29608470697851377752012-01-21T14:17:38.461+00:002012-01-21T14:17:38.461+00:001. The Paradox of Thrift
As Simon has said, it...1. The Paradox of Thrift<br /><br />As Simon has said, it's called a paradox for good reason. It is obviously counter-intuitive and apparently quite difficult to grasp, even for economists. For this reason it is natural that political arguments based on the paradox of thrift will be a hard sell at the best of times. In the current circumstances, the argument that the government should increase borrowing--at a time when it is obvious that it has been borrowing too much (the structural deficit is too big), when high levels of debt have been associated with the financial crisis, when household indebtedness is perceived to be too high, and where our European neighbours are facing sovereign debt crises--is always going to be tough. And in fact, it's far from obvious that it would be the right policy for the UK at this time.<br /><br />2. Populist Policies <br /><br />The irony of Toynebee's position is that Keynesian demand-management is inherently populist. People tend to be naturally suspicious of the free market and in favour of government intervention to protect jobs, living standards, public health, the environment etc. Throughout history, the case for laissez-faire capitalism has always been the more sophisticated and difficult to accept. The idea that the government should pull up its sleeves and intervene in the economy for the national interest, or for the benefit of the common man, can been seen in support for Keynesian stimulus just as much as protectionism, regulation of business, immigration controls, and protecting businesses/industries in the face of competition.<br /><br />Having established that Keynesian policies are populist, the question becomes: is Keynesian stimulus actually bad, or might it be populist and good? (The same question could be posed regarding tax cuts, of course). Essentially, history has shown that, in general, fiscal stimulus is bad policy. Today, most economists view monetary policy as the correct tool for preventing recessions, and regard fiscal stimulus as more costly and less effective. Milton Friedman, one of the first economists to promote such views, would also stress the political problems associated with fiscal stimulus (e.g., there's nothing as permanent as a temporary government program).<br /><br />3. The Influence of Economists on Policy-Making<br /><br />As with the previous post, UK Deja Vu, there seems to be an assumption that governments should follow the advice of academic economists when making policy. There is a lot that could be said on this, but as this comment is getting long I'll just make 2 key points. In a democracy, it is up to the people to decide, not "experts". Even if we accept a scientific consensus on climate change, say, it does not follow that we must adopt the policies advocated by the climate scientists. In that role, their opinions are no more authoritative than any other voter. Similarly, the medical profession has no authority to argue for an increase in alcohol taxation. We listen to the expert opinions (the effects of carbon on climate, the effects of alcohol on health), then we make up our own minds.<br /><br />Having said this, it is obvious that if we want to build a bridge, we should take advice from engineers; if there is an epidemic we would listen to doctors etc. So should economists enjoy the same level of respect? I think the fact is that most people believe economic knowledge is not as reliable as other fields. To put it more bluntly, scientists and engineers deal in facts, whereas economists are offering opinions. It doesn't help that economists so often make predictions which turn out to be wrong. So the question really is, why should governments base policy on consensus opinions? The consensus opinion in most UK universities would probably lead to a Labour government being elected, so why should the Tories base policies on the economic opinions of a subset of that group?econojonhttps://www.blogger.com/profile/11836028530972814027noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-7872457827007856692012-01-21T11:01:13.298+00:002012-01-21T11:01:13.298+00:00"...but in the past the influence has come fr..."...but in the past the influence has come from the left as well as the right."<br /><br />Good to see you add that bit.<br /><br />We need to remember too that the expert consensus is not always right. Milton Friedman was once seen as part of the loony fringe in macroeconomics, but a lot of mainstream New Keynesian macroeconomics (consumption-smoothing, natural rate of unemployment) derives from Friedman. And I hate to think where we would be now if the political system had been designed by e.g. UK academic social scientists pre-1990, who were rather Marxist in orientation.<br /><br />Part of the trouble with the Paradox of Thrift is that different people mean very different things by "thrift". (I think it's really a paradox of hoarding, not thrift). "We all need to invest more for the future, both private and government sector" has a very different ring to it in the public ear, and is very different in economic theory too.Nick Rowehttps://www.blogger.com/profile/04982579343160429422noreply@blogger.com