IMF Musings: Can Higher Inflation Be a Good Thing? - SPIEGEL ONL In 1972, Helmut Schmidt, then Germany's minister for both economics and finance, declared at an election campaign appearance that "5 percent inflation is easier to bear than 5 percent unemployment." When Schmidt became chancellor of West Germany just two years later, he got both. Inflation soared to 4.9 percent, while unemployment reached 7 percent, its highest level since the end of World War II. History seems to be repeating itself. A few days ago, a renowned economist again addressed the world and promoted an increase in inflation as being in the supposed interest of the common good. The statements were published in a staff paper co-authored by Blanchard and IMF economists Giovanni Dell'Ariccia and Paolo Mauro. The currently accepted doctrine holds that national debt is bad. Too Narrow-Minded Blanchard also takes issue with the widely-held belief that governments shouldn't meddle with the economy, aside from intervening indirectly via the raising and lowering interest rates.
Urbanomics Macroeconomics for the 21st century: Part 1, Theory | vox - Rese Roger E. A. Farmer , 27 February 2010 Modern Keynesians base their ideas on a version of Keynes’ General Theory that assumes that prices and or wages are “sticky” (Clarida et al 1999). In a pair of columns, I summarise results from a research agenda that reconciles Keynesian economics with Walrasian general equilibrium theory in a new way that does not assume “sticky prices”. My research focuses on two key ideas from Keynesian economics and one from microeconomic theory. Although I recognise that the market system may lead to inefficient outcomes with high unemployment, I do not believe that fiscal policy is the right response to a financial crisis. The model I will describe is designed to capture two key ideas. There are two distinct physical goods, capital and a consumption good. The return to capital represents the profit stream of the firm. There are two technologies. Let’s suppose that households can appoint a social planner to organise production. Figure 1.
Study uncovers 'de-urbanization' of America Public release date: 23-Sep-2009 [ Print | E-mail Share ] [ Close Window ] Contact: Brendan M. Lynchblynch@ku.edu 785-864-8855University of Kansas LAWRENCE — More than any other populace on Earth, Americans are on the move. Now, one researcher at the University of Kansas has made a vital study of how a population in perpetual motion impacts local tax bases and economies around the nation. Art Hall, executive director of the Center for Applied Economics at the KU School of Business, said he uncovered three key themes to American population shifts by looking at annual data collected by the Internal Revenue Service on county-to-county migration: He found that Populations are relocating to coastal areas (with the major exception that inhabitants for the first time are taking flight from California's prohibitively priced seaboard) People are moving out from major metropolises to smaller cities The general migration trend in the U.S. now is eastward rather than westward [ Print | E-mail
Midwest Economy Sustainable Urban Mobility in 2020 To make the car of the future, we need to make the city of the future, says MIT designer Ryan Chin. How can you design a city by designing a car? Today’s automobiles are driven by an increasing number of users who live in cities. The United Nations reported in 2007 that migration patterns and population growth have created an equal split between inhabitants of cities and rural areas for the first time in human history. In 1950, New York City was the only megacity on the planet, with 10 million occupants. The world’s automobile fleet is currently estimated at 800 million cars that serve the 7.8 billion people living on Planet Earth. Size and Weight 2010: Today’s automobiles weigh an average of nearly 4,000 lb, approximately 20 times the weight of the driver. 2020: Tomorrow’s automobiles will be more lightweight and smaller. Range and Speed 2020: Tomorrow’s automobiles will not need that much refueling autonomy. Gasoline versus Electric Driver-Controlled versus Autonomous Driving 1. 2. 3.
A parable about how one nation came to financial ruin. - By Char In the early 1700s, Europeans discovered in the Pacific Ocean a large, unpopulated island with a temperate climate, rich in all nature's bounty except coal, oil, and natural gas. Reflecting its lack of civilization, they named this island "Basicland." The Europeans rapidly repopulated Basicland, creating a new nation. They installed a system of government like that of the early United States. There was much encouragement of trade, and no internal tariff or other impediment to such trade. Moreover, almost no debt was used to purchase or carry securities or other investments, including real estate and tangible personal property. In its first 150 years, the government of Basicland spent no more than 7 percent of its gross domestic product in providing its citizens with essential services such as fire protection, water, sewage and garbage removal, some education, defense forces, courts, and immigration control. The tax system was also simple. And then came the twin shocks.
the-ten-biggest-american-cities-that-are-running-out-of-water: Personal Finance News from Yahoo! Finance By Charles B. Stockdale, Michael B. Sauter, Douglas A. Some parts of the United States have begun to run low on water. The water problem is worse than most people realize, particularly in several large cities which are occasionally low on water now and almost certainly face shortfalls in a few years. 24/7 Wall St. looked at an October 2010 report on water risk by environmental research and sustainability group Ceres. The analysis allowed us to choose ten cities that are likely to face severe shortages in the relatively near-term future. Severe droughts that could affect large cities are first a human problem. The ten cities on this list are the ones with the most acute exposure to problems that could cause large imbalances of water supply and demand. These are the ten largest cities by population that have the greatest chance of running out of water. 10. North-central Florida, especially Orange County where Orlando is located, has experienced frequent droughts in the last decade. 9. 8.
The Conference Board - Trusted Insights for Business Worldwide Federal income tax is the enemy of urbanism Finishing my dissertation this year has forced me to come out of my troll-cave and interact a lot more with my econ department. And that has been a very good thing! There is so much cool economics going on at the University of Michigan that I didn't even know about that I've decided to start blogging about it. Today's interesting nugget comes from UMich prof David Albouy, for whom I briefly worked as a research assistant a few years back. David has zeroed in on one way in which our government stacks the deck against cities: Income tax. The point is not just that this is unfair (as the Times article contends), but that it's inefficient for our economy. There are several reasons that this is true. Another reason is knowledge spillovers. So when the federal government levees the same percentage tax on San Franciscans that it levees on people in College Station, it is discouraging high productivity.
Alphaville Elsewhere on Wednesday, - The real problem with HFT. - Summers’ inverse Say’s Law. - The impolitic wisdom of Simon Kuznets. - Buying the future. Markets: Japanese stocks suffered as hopes for monetary stimulus faded, but the rest of Asia-Pacific was upbeat after Wall Street staged a rally. We all know the role played by the vendor financing feedback loop of hell in dotcom bubble mark 1. Quickly summarised, tech equipment suppliers became overly dependent on sales to internet startups funded through vendor financing, a situation which saw them lending money to companies with dubious track-records for the purpose of buying equipment directly back from them. Nevertheless, it’s still a model replicated on a consumer level in the west, whether it’s through car company lending money to customers so that they can buy their cars or sofa company loans for purchases of sofas. Read more If you’re short the rupee* the past few months have been uncomfortable. From Goldman, for example: Read more Read more