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Consumer Spending, Says Law, and Why Keynes Is Wrong
#21
Also, one aspect of the 'structural' unemployment I've heard is that people aren't giving up their jobs as easily, because they can't move because they're underwater on their mortgages. If so, then that would imply an expansion of mortgage modification programs. Bottom line, structural unemployment doesn't excuse government inaction, and it may even require more of it, in more subtle ways.
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#22
(08-17-2011, 07:42 PM)b5d Wrote: Also, one aspect of the 'structural' unemployment I've heard is that people aren't giving up their jobs as easily, because they can't move because they're underwater on their mortgages. If so, then that would imply an expansion of mortgage modification programs. Bottom line, structural unemployment doesn't excuse government inaction, and it may even require more of it, in more subtle ways.

Negative home equity is indeed contributing to structural unemployment. People can't follow the jobs without taking a huge loss on their home. However, lack of education and specialized training are still the primary reasons.
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#23
(08-17-2011, 05:51 PM)b5d Wrote:
(08-17-2011, 01:36 PM)Brooklyn Wrote: Inventories are part of the "I" component of GDP.
I is investment...inventories are generally not counted in GDP, which only measures finished goods.

Of course I is investment. What did you think I meant?

Anyway, changes in inventories are indeed counted in the "I" component of GDP as it should be. I'm not talking about inventories of works in progress, or raw materials to be used as inputs (although the bullwhip effect applies to these products just as it does to finished inventory). Much inventory is considered "finished". Any finished good that is unsold is part of the "I" component of GDP. When it is sold, that sale (increase in "C") is offset by an equal change in inventory (decrease in "I").

If you don't believe me, please see the link below from the University of Colorado's economics department:

http://www.colorado.edu/Economics/course...nents.html

Bythe way, there are also many things that aren't "finished goods", that are counted in GDP that would probably surprise you. See imputed GPD.
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#24
By the way, we really aren't talking about some GDP equation from the intro macro class. I never intended to begin discussing how GDP is calculated. That wasn't my point. My point was to talk about what actually happens in the real world. In the real world inventory represents a significant short-run investment for firms. While it's true that I expressed my point in the terms of the expenditure equation, it doesn't mean I intended to discuss the equation or how it's calculated. I hope that makes sense. I only intended to discuss reality.

This kind of stuff is why I wish I would have earned my degree in accounting and not economics.
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#25
Obtaining a second degree, in accounting, should be pretty easy, considering that you already have the majority of required courses for each major. Right?

Of course, sooner or later, we are going to move to the "flat tax" or "fair tax" model, and accountants are going to be a dime-a-dozen.
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Hillary Clinton Is Like Herpes, "She Wont Go Away" - Anna Paulina
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#26
(08-18-2011, 02:41 PM)Brooklyn Wrote: This kind of stuff is why I wish I would have earned my degree in accounting and not economics.
Accounting is a 'cost center' of any company. If you know how to multiply ratios and do some other basic things like that, there's not that much that's insightful in accounting. Of course, a detail-oriented mindset in general is a good thing to have, but that's really more on the 'soft skills' end. Economics, if done right, on the other hand, lets you conceive of things that might otherwise be too abstract to think about.
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#27
I was joking with that last statement - trying to take a jab at how economics discussions seem to end up in equations, functions, ect, so why not just be an accountant. I've posted on here before about too many economists seem to forget about reality because they are too busy focusing on their model of reality.

Anyway, I'm starting grad school in the fall. I'm going after an MPA in non-profit management.
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#28
(08-19-2011, 02:07 AM)b5d Wrote:
Brooklyn Wrote:This kind of stuff is why I wish I would have earned my degree in accounting and not economics.
Accounting is a 'cost center' of any company. If you know how to multiply ratios and do some other basic things like that, there's not that much that's insightful in accounting. Of course, a detail-oriented mindset in general is a good thing to have, but that's really more on the 'soft skills' end. Economics, if done right, on the other hand, lets you conceive of things that might otherwise be too abstract to think about.

People and companies employ accountants because the tax laws are a tortuous labyrinth. Smart trained people are needed in order to minimize taxes or simply to file one's tax return. There is more to accounting than double entry book keeping and multiplying ratios.
Jefferson: I place economy among the first and important virtues, and public debt as the greatest of dangers. To preserve our independence, we must not let our rulers load us with perpetual debt. We must make our choice between economy and liberty, or profusion and servitude. If we can prevent the government from wasting the labors of the people under the pretense of caring for them, they will be happy.
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#29
And speaking of Keynesian Economics, here is another 'strange source' doing the unthinkable: Making Fun of Keynesian Economics.

Quote:s sometimes difficult to make fun of Keynesian economics. But this isn’t because Keynesian theory is airtight.

It’s easy, after all, to mock a school of thought that is predicated on the notion that you can make yourself richer by taking money from your right pocket and putting it in your left pocket.

The problem is that it’s hard to utilize satire when proponents of Keynesian theory say things that are more absurd than anything critics could possibly make up.

Paul Krugman, for example, stated a couple of years ago that it would be good for growth if everyone thought the world was going to be attacked by aliens because that would trigger massive military outlays.

He also asserted recently that a war would be very beneficial to the economy.

Equally bizarre, he really said that the terrorist attacks on the World Trade Center would “do some economic good” because of the subsequent money spent on rebuilding.

And let’s not forget that John Maynard Keynes actually did write that it would be good policy to bury money in the ground so that people would get paid to dig it out.

As you can see, it’s difficult to mock such a strange theory since proponents of Keynesianism already have given us such good material.

[Image: keynesian-fire.jpg?w=500]
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Hillary Clinton Is Like Herpes, "She Wont Go Away" - Anna Paulina
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