tag:blogger.com,1999:blog-2546602206734889307.post7538205073590732149..comments2024-03-18T11:12:51.114+00:00Comments on mainly macro: DisasterMainly Macrohttp://www.blogger.com/profile/09984575852247982901noreply@blogger.comBlogger35125tag:blogger.com,1999:blog-2546602206734889307.post-10160828016995808272015-03-01T22:34:54.289+00:002015-03-01T22:34:54.289+00:00all that is probabl true, but it doesn't expla...all that is probabl true, but it doesn't explain why growth started to fall back in 2007. The tendencies you describe have been going on over a longer period and the results should thus manifest themselves over a similar period.Andy Rhttps://www.blogger.com/profile/01942445460732496214noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-8892053763952936032015-03-01T05:49:33.354+00:002015-03-01T05:49:33.354+00:00I come from a US perspective. We had a lot of pain...I come from a US perspective. We had a lot of painful deleveraging that gutted demand, increasing an output gap. Mild fiscal stmilus at the federal lvl but hard austerity at state and local lvl. I think the near death of unions sparked inequality and the growth of the financial sector are troubling signs. Income inequality in a democracy where corporations are legally persons creates a power feedback loop, where the wealthy buy more power to secure more money for heirs. This money rots trusts and you get secular stagnation.<br /><br />Welcome to the machine.Anonymoushttps://www.blogger.com/profile/07944928931697915829noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-62961380688985332412015-02-28T21:34:34.283+00:002015-02-28T21:34:34.283+00:00If Deutsche Bank goes belly up and Germany chooses...If Deutsche Bank goes belly up and Germany chooses to save it in the way that the UK government burdened us with saving RBS, then Germany might also come to suffer such a period of economic floundering - I hope Germany has more sense. The "Greek bailout" makes me fear that they (like the UK) will be suckers since the Greek bail out was really just a bail out of the creditor Banks -perhaps a portent of more to come.stonehttp://directeconomicdemocracy.wordpress.com/noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-78122413808319526212015-02-28T20:05:02.876+00:002015-02-28T20:05:02.876+00:00Recently I did a long term analysis of the macro e...Recently I did a long term analysis of the macro economic performance (population, GDP per capita, deflator) of the whole US history (page 8), with explicit modelling,<br /><br />and did (start) now the the same for the UK (page 9)<br /><br />http://de.slideshare.net/genauer/sampler-2-of-imf-2014-weo-data-plots <br /><br />For both the transistion to the higher growth regime (2%) from the prior less than 1% was triggered by a war demanding massive resources (civil war for the US, WWI for the UK)<br /><br />Both started systematic inflation after 1900 US 2%, 1915 UK 5%<br /><br />Please also note the marked changes in population growth in the UK around 1800 and 1920, genauerAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-86150615952881614582015-02-28T19:50:59.149+00:002015-02-28T19:50:59.149+00:00would you mind to provide any evidence for your nu...would you mind to provide any evidence for your numerous claims?<br />The OECD number for UK output gap is 1.2% in 2015 (Annex Table 10)<br /><br />There are no hidden reserves to be lifted to account for the huge current account and government deficits<br /><br />Taxes can not be really raised, so cutting expenses it will be<br /><br />OR <br /><br />taking on ever more debt and inflating it away, the time honored strategy of the UK, after 1920, just that there is now the Euro as an alternative : - )Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-35576497421866224262015-02-28T19:30:11.320+00:002015-02-28T19:30:11.320+00:00The output gap is big with unemployment low becaus...The output gap is big with unemployment low because capital is being substituted for with low wage, low grade human labour. It even extends beyond what the unemployment figures imply because people are now retiring later. We go from having high tech machines doing the work to having to do it by hand. The high paid jobs inventing and making the machines get replaced by a larger number of crap jobs. It ruins the economy because future profits come from reinvested current profits. Now there is no investment because cheap labour can substitute for machines so instead profits go to share buybacks and future profits have to come from government deficits and debt expansion.stonehttp://directeconomicdemocracy.wordpress.com/noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-28948058190402798062015-02-28T19:18:55.838+00:002015-02-28T19:18:55.838+00:00Read David Edgerton,
"Science, Technology a...Read David Edgerton, <br /><br />"Science, Technology and the British Industrial ‘Decline’ 1870-1970"<br />(Cambridge University Press, 1996).<br /><br />I would also thoroughly recommend any of his seminars or lectures - I saw one in Japan, brilliant. <br /><br />Questions relating to the fundamental causes of rise and (absolute, not only relative) decline of Great Britain are very important which all economists and historians should know something about. It is a bit like a Classicist understanding the causes of Athenian democratisation and the decline of Rome.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-70789139585283185822015-02-28T17:54:15.216+00:002015-02-28T17:54:15.216+00:00The IMF 2014 WEO shows an output gap of just 1% f...The IMF 2014 WEO shows an output gap of just 1% for the UK.<br /><br />Together with a current account deficit of 4%, and government deficit of 4% (each of GDP) there will be substantially blood letting to do after the May 2015 elections.<br /><br />Given those deficit numbers, the massive increase of government debt from 47 to 91% during the crisis, people from the continent wouldnt call this "austerity"Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-3321782170459505672015-02-28T17:50:07.362+00:002015-02-28T17:50:07.362+00:00since your NIER article, or versions of it, doesn&...since your NIER article, or versions of it, doesn't seem to be available, would you like to post your international comparison plot here as well?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-172541387236259802015-02-28T17:28:59.457+00:002015-02-28T17:28:59.457+00:00From a historical point of view you were correct t...From a historical point of view you were correct to avoid the period 1914-1950, these were periods of exceptional tumult that will distort any long term trend. As Piketty, Maddison and others have pointed out these left long legacies into the post-WWII period and if included give misleading views about the dynamics of capitalism. Many would also argue that the period 1950-1970 (the so-called "Golden Age") was also exceptional in its 'benigness' as it set off by one off technological innovation from military related one off extraordinary technological innovation and recovery from destruction. But we do not want a war to deal with 'secular stagnation'! Have you read Schumpeter and his theories about 'creative destruction'?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-79658187871624187552015-02-28T14:46:02.706+00:002015-02-28T14:46:02.706+00:00The anomaly in the UK is that if the output gap is...The anomaly in the UK is that if the output gap is as large as this analysis suggests, why is the unemployment rate not higher?Anonymoushttps://www.blogger.com/profile/13473661280678620614noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-8416119374307523862015-02-28T14:25:07.509+00:002015-02-28T14:25:07.509+00:00The financial community exploited modern informati...The financial community exploited modern information and telecommunications (ITC) and realized in the late 1990s that it could in fact make its fees/gains/profits by fueling huge marketplaces where financial-assets are being traded - so they moved away from their historic role as an endogenous lender for real-economy purposes. Especially outside the US, the basics of the demographics also told them to look elsewhere for their gains.<br /><br />The financial crisis caught them up (I just can't stop thinking about how Ponzi, Madoff, needed speed of turnover and exuberance to mask what was going on to almost everyone).<br /><br />Now the financial community, not only has forgotten how to lend traditionally but find themselves in legal/financial positions and huge interconnected marketplaces where their hands are tied, and they are scared that this may all fall apart.<br /><br />The public needs to re-define the financial community - help the sectors within the financial community find what their purpose are now. I'd use the stable models of before as comparative models (Bagehot may return!). <br /><br />The current situation is clearly not working for the bulk of society.<br /><br />JFAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-9485772302891087872015-02-28T13:28:20.990+00:002015-02-28T13:28:20.990+00:00I used similar numbers in my NIER article. Notice ...I used similar numbers in my NIER article. Notice that the low UK trend here is due only to the post recession numbers. Mainly Macrohttps://www.blogger.com/profile/09984575852247982901noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-8588847967420967092015-02-28T13:20:37.245+00:002015-02-28T13:20:37.245+00:00Anonymous@27thFeb09:03, you ask, "What exactl...Anonymous@27thFeb09:03, you ask, "What exactly will happen if we do not reduce the deficit?"<br /><br />I guess the stock answer is that we get devaluation relative to other currencies but if all countries are doing it then it gets even more murky. I think the key danger is that you empower a constituency holding those financial assets (bonds or deposits or cash) who campaign to uphold the value of those assets even at the expense of having a successful economy. Basically you get a campaign for secular stagnation. I had a go posting about it:<br />https://directeconomicdemocracy.wordpress.com/2013/03/24/political-consequences-of-risk-free-financial-assets/stonehttp://directeconomicdemocracy.wordpress.com/noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-3090766315785374812015-02-28T13:06:48.657+00:002015-02-28T13:06:48.657+00:00The IMF WEO data for the last 10 years, comparing ...The IMF WEO data for the last 10 years, comparing US, UK, Euroarea, Germany, Japan<br /><br />http://de.slideshare.net/genauer/gd-pper-capita-in-ppp-us-versus-euroarea-germanyAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-82157719082866587622015-02-28T08:04:18.215+00:002015-02-28T08:04:18.215+00:00Perhaps that 1950-2008 period was the playing out ...Perhaps that 1950-2008 period was the playing out of an unsustainable process. It entailed allowing debt and wealth inequality to let rip and at the same time required both debt and wealth inequality to not be too great. Increasing debt and increasing wealth inequality can boost inward capital flows and growth even though increased debt and increased wealth inequality smoother it. The low level of household debt and relatively flat wealth distribution in 1950 set things up for the transition to our present state. Perhaps it is a big mistake to pretend that we can keep doing what we were doing and get the results we were getting?stonehttp://directeconomicdemocracy.wordpress.com/noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-10543148731811802402015-02-27T23:26:25.533+00:002015-02-27T23:26:25.533+00:00Dumb off-topic question: what caused that big long...Dumb off-topic question: what caused that big long boom in the 1870's?Nick Rowehttps://www.blogger.com/profile/04982579343160429422noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-27296970777885123022015-02-27T18:09:45.262+00:002015-02-27T18:09:45.262+00:00I wonder whether what was needed in 2008 was to ha...I wonder whether what was needed in 2008 was to have let vast swathes of the financial system go bust and shut up shop with the employees changing career. The payment system could have been kept going as a nationalized utility until basic low cost private sector alternatives got going. We then wouldn't be carrying the administrative burden of our vast financial apperatus. With all those highly educated talented people doing something other than concocting toxic debt, we might now be thriving.stonehttps://www.blogger.com/profile/16420341212847543229noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-88003373995677529962015-02-27T17:06:26.511+00:002015-02-27T17:06:26.511+00:00> Anonymous 8.04
and
> Mainly Macro
Oh I...> Anonymous 8.04<br /><br />and <br /><br />> Mainly Macro<br /><br />Oh I see , and thats why there are no units , ta !<br /><br /><br /><br />Dinerohttps://www.blogger.com/profile/14632385731642361211noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-91297337860264123752015-02-27T17:03:34.007+00:002015-02-27T17:03:34.007+00:00SWL there is the "ultimate question" tha...SWL there is the "ultimate question" that nobody is asking. Macro-media has no idea what the correct answer is, because it wouldn't understand the question in the first instance. The standard of economics journalism in the UK is pathetic. They all are welded to the neo-liberal myth, that a sovereign fiat currency nation has to "borrow" money from the "markets"; and, that the government can't spend money until it gets some money by taxing the non-government sector. All our political parties are welded to this myth.<br /><br />An economist from a premier league University, should ask the question of our politicians, in the "macro-media":- <br /><br />What exactly will happen if we do not reduce the deficit?<br /><br />AcornAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-8673173601215315632015-02-27T16:11:30.173+00:002015-02-27T16:11:30.173+00:00I do not need to redraw anything. The variable is ...I do not need to redraw anything. The variable is what it says it is in the heading on the chart (and yes, it is the natural log). Mainly Macrohttps://www.blogger.com/profile/09984575852247982901noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-30968786427973801762015-02-27T16:04:50.158+00:002015-02-27T16:04:50.158+00:00The biggest laugh a proper Mathematician gets is w...The biggest laugh a proper Mathematician gets is when he sees an Economist, trying to use Mathematics in his models. https://www.aeaweb.org/articles.php?doi=10.1257/jep.29.1.89 .<br /><br />Anyway, it looks like log to the base "n", that is "e" (2.718) to the power of x. So for the x axis max' above that would be e^3.25 = 25.79 assumed to represent £25,790, which is pretty close to the actuality.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-77629226748667013642015-02-27T15:36:40.980+00:002015-02-27T15:36:40.980+00:00Those graphs are a mess , you need to redraw the Y...Those graphs are a mess , you need to redraw the Y axis with logarithmic divisions and re - label in the logarithmic formDinerohttps://www.blogger.com/profile/14632385731642361211noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-36887796293863881232015-02-27T14:49:26.046+00:002015-02-27T14:49:26.046+00:00The change in the trend rate is no big mystery. T...The change in the trend rate is no big mystery. The two trend rates as plotted, intersect in 1932. Older members of mainly macro's "Pseuds Corner", will be aware that this was the time of the partial abandonment of the Gold Standard and the start of a move to using FIAT currency as sovereign nations "unit of account".<br /><br />PS. A "Unit of Account" IS NOT the same as "money" as generally understood by the proletariat. (Acorn).Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-52533400474167490892015-02-27T14:38:06.551+00:002015-02-27T14:38:06.551+00:00It doesn't look logarithmic it looks like £500...It doesn't look logarithmic it looks like £5000 per equal spaced division.Dinerohttps://www.blogger.com/profile/14632385731642361211noreply@blogger.com