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Maddie Kosar
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As Kasey and PJ point out, Blanchard suggests that the Fed targets a higher inflation rate so that debts are lowered and we can more easily pay them off. If debt is eliminated or eased somewhat, our MPC can rise because we will be consuming more instead of just paying off debt. This will allow our economy to grow even more. As Mitchell mentions, inflation also helps exporters, which in turn allows GDP to grow. We need businesses to borrow and invest, but with such low profit expectations, they have nearly no incentive to invest. Maybe if inflation was higher, people would spend more and businesses would have the need to grow, but we need to see this put into action without the government raising taxes and essentially canceling out the efforts of the Fed to stimulate consumption.
Building upon Jean and Kelsey's point, quantitative easing may have some effects in the short run, but if it is not a great help for the long run, we will definitely have to find another way to stimulate our economy and help debt and inflation in the long run. Changes in the short run may be very popular because they seem to work now, but as we have learned, quick and easy changes are not always the answer to success in the long run for our country. I also agree with Mitchell's point about the banks already having money in their reserves. Why will this cause them to purchase more assets if they already have money in their reserves now? This policy seems to have some flaws that need to be very well justified in order to put it into place.
As Kasey points out, this article does a good job of highlighting the difference in MPC for the rich and the poor. As the article states, pumping more money into the economy will reduce debt, and people may be more likely to pay off that debt than consume, so we would end up with inflation but not necessarily more spending. The data that this article presents gives reason to tax the upper classes more since their MPC is much lower than the lower classes, but this runs into many problems because of the opposition of raising taxes by the higher class. It works in theory, but many politicians are reluctant to do so because it will cause growing resentment. This article does a good job of presenting important evidence, but it does not offer us many explicit answers. It is very hard to implement these policies because of the ambiguous outcomes, but with a long lasting 7% unemployment rate, we must try something new to help our economy.
In response to Matt, inflation may not be a factor that we consider for future purchases, but it is certainly something that comes into play for the present. Higher inflation means a higher price level, and since price level is higher, wages theoretically will also be higher, therefore consumer spending should increase. This would lower relative debt and allow them to consume more. It is important to note, however, that using policy to change our aggregate supply might not be necessary because wages are sticky in the long run and eventually aggregate supply will shift to meet aggregate demand at our potential output. Since we have not been at potential output for so long, inflation could be a good choice to combat our current level of unemployment. There are obvious downsides to inflation, but as we have found no answer to our unemployment problem yet, it could be the answer to our problems. The only question is if it is the answer in the long run or the short run, which can only be found out through experimentation.
Syed brings up an interesting theory about the choice to leave the labor force in order to obtain another degree. This is definitely a viable hypothesis that can account for some of the decrease in EPOP, but due to the state of our slow changing economic status, it is still very likely that discouraged workers have just left the labor force. Since the biggest drop was in the group with no high school degree, it is a good thought to guess that they may just have gone back to school. We must also consider, however, the amount of people that are underemployed as well as unemployed. Sometimes when we focus too much on the unemployment rate, we overlook the problem of underemployment. If this article also included the change average household income for each group, it would be much easier to analyze how this decrease in unemployment is truly helping the families.
This article is one that many of us as college students should take note of. Quality of sleep is a problem that college students face daily, and sometimes seems uncontrollable. The biggest problem, however, is that many students would not be willing to buy into using time to take taijiquan classes. With so many positive outcomes, it is definitely something that we could all gain from. It is not surprising that if taijiquan helps sleep, that it also increases mindfulness because if we are better rested, we think more clearly. This study obviously has some problems, since you cannot really measure "mindfulness" or actual stress level, but it does help to make a strong case for increased awareness of mindfulness.
An end to poverty seems too good to be true. The problem of the distance between rich and the poor has existed for countless centuries. Although we all want to believe that we can eradicate poverty, this goal seems to be unreachable, especially by the year 2030. Sachs' point about the spread of technology, however, does give us hope that we can fix extreme poverty. New technology in medicine allows us to administer it at lower prices and help combat certain diseases that may have impeded people from working. Sachs also mentions that "smartphones are poised to transform education, health care, finance and agricultural value chains." Although these are helpful to reducing poverty, it seems much too optimistic that we can completely rid ourselves of it in such an unpredictable world, but we can certainly keep working towards it.
I agree with Jacob's reasoning about the lack of proposals of change; if we want change to happen, we cannot merely complain about what is in place. Instead, we must work to change what we do not like. Reich brings up a lot of good questions about what should and should not be defined in our laws, but does not give very much opinion either way. He may simply be trying to get us thinking as a nation, but in order to have a major effect, Reich would be better off stating possible resolutions to our current problems. It is also important to note that he is focusing on the extreme right side of the spectrum in his criticisms. Not all conservatives support a completely free market with no laws to control it, and it seems as if he is out to vilify a group of people rather than find an answer to a problem. His article is very passionate, which gives it an authoritative tone, but on further inspection, it is only restating a problem that we have tried to fix for over a century.
Toggle Commented Sep 17, 2013 on Link from Twitter econ 102 at Jolly Green General
Going off of what Jean commented, I agree with Krugman's point. Economics is not about developing ideas based off of one situation, but rather empirical evidence. Trends are best observed over long periods of time. Economics, as a science, should treat its theories as scientists treat their experiments. Scientists cannot prove a hypothesis until it is tested time and time again, and the same must follows for economics. However, as humans, we are swayed by our preferences and can be led to false conclusions due to our desire to be correct. This probably leads politicians to quick conclusions as brought up by Krugman. We can easily identify that one example does not mean the theory is proven correct, yet as Krugman states, "that doesn’t mean that they won’t gain traction." We must learn to look at the whole economy over time, not just recently, which is a hard tactic with today's technology. The big picture will give us a clearer look at what is actually going to help in the long run, not just what is going to help us now.
Toggle Commented Sep 12, 2013 on Your Textbook Author.... at Jolly Green General
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Sep 11, 2013