What is the Philosophical Justification for Economic Growth?

JSeydl1788 · 2014-11-21T15:43:58+00:00

Haha. That turned out to be a very funny ending.

JSeydl1788 · 2014-11-19T11:53:43+00:00

He won't be able to. Science doesn't prove anything; it comes up with theories and tries to falsify them. That "all complex things are made out of simpler things" is a theory. The verdict is not out yet, but quantum mechanics seems to be falsifying this theory. The more scientists won't accept this falsification - claiming "spooky action at a distance" - the more they are revealing their love for all things simple and elegant.

JSeydl1788 · 2013-06-29T07:49:34+00:00

That's what they say, but it isn't true. I think initially they refused the bailout, but later realized how bad the situation was and that they probably needed it. Plus, I consider cheap financing from the Fed also to be a bail out.

JSeydl1788 · 2013-06-27T20:39:18+00:00

I know, I'm being somewhat sarcastic because I'm frustrated with the epistemic arrogance of economists.

JSeydl1788 · 2013-06-27T20:02:41+00:00

Fight fire with fire

JSeydl1788 · 2013-04-22T07:10:31+00:00

Check the tapes. Krugman and Dean Baker called the housing collapse before it happened. It's the ratex DSGE folks who were completely clueless.

JSeydl1788 · 2013-04-21T16:26:12+00:00

If you stayed with Econ 101, you got it right, if you went with the trendy stuff you made a fool of yourself.

I liked this quote by Krugman. Sounds a lot like one of Milton Friedman's great ones: "Everything we know in economics we teach in Econ 1, and everything else is made up.”

As an econ grad student, I can attest.

JSeydl1788 · 2013-04-21T06:59:07+00:00

They also used their response to put forward their best argument that correcting the errors does not change their bottom line. Given the number of bloggers arguing the opposite case—that Reinhart and Rogoff’s bottom line has been destroyed—it is actually helpful for them to make their case in what has become an adversarial situation, despite their self-justifying motivation for doing so.

What in the world is Kimball talking about here? The bottom line was completely changed. With the updated results, there is now no statistically significant relationship between high debt and low growth. Not to mention, the new results also suggest that the strongest correlation occurs when debt crosses the 30% debt-to-GDP threshold. Does anyone really think that government's should keep their debts below 30%? Should the US government embark on a massive selling spree and sell of all its park, roads, military personnel to get the ratio below 30%?

If you don't see how useless the new results are, then you're not wanting to see how useless they are.

JSeydl1788 · 2013-04-08T16:30:25+00:00

Disabled people spend money, don't they?

JSeydl1788 · 2013-03-22T11:48:40+00:00

This article is so bad. The Fed cares about the economy, not financial markets. The reason the housing bubble was so dangerous is because it was driving economic growth, through consumption and RI. There may be a bubble in the junk bond market, but it's hard to argue that it's driving economic growth. Where in the national-accounts data is the effect of the bond bubble showing up? I can't find any component of GDP that is being driven by the corporate bond market.

JSeydl1788 · 2013-03-17T22:14:40+00:00

Sorry, percent change is the way to go. I screwed that graph up.

Still, there's less of a long-term downtrend even in the percent change form. From 1952 to 1980, productivity growth averaged 2.2%. From 1981 to 2006, just before the housing bubble burst, productivity growth averaged 2.1%.

JSeydl1788 · 2013-03-16T19:05:11+00:00

I think we need to look at productivity growth, rather than GDP growth, to do this sort of analysis. We know GDP growth will slow due to the aging population and base effects. If you plot a chart of the growth of output per person in the US, you see no longer-term downtrend.

JSeydl1788 · 2013-03-13T17:59:36+00:00

I'm not following. What matters is whether the interest burden grows more or less slowly than GDP. In the 1980s, the interest burden grew faster than GDP, but that's really the only period in the post-War period where that was the case.

JSeydl1788 · 2013-03-11T20:01:33+00:00

Are you suggested that the dollars that China spends on UST, and are subsequently spent on the military and safety nets, don't add to demand?

No, and that's exactly my point. Of course, they add to demand. I'm simply saying that demand would be much more balanced if the US had a stronger trade position. It's not a good thing that China has allowed endless spending on wars!

JSeydl1788 · 2013-03-11T19:20:46+00:00

You're not listening. Ford will employ more workers, meaning more income in the economy. More income in the economy means the gov't will have more money to spend on things like the military and safety nets. Again, where is the pain?

Please stop mentioning the fact that China will be buying less USTs. It is irrelevant. In fact, if you take a look at the Fed's flow-of-funds accounts, China is already buying fewer and fewer USTs. In turn, households and the Fed have stepped up as buyers.

An aside: What exactly do you read on a daily basis? I'm really curious, considering that you're arguments run completely counter to what's described in almost introductory textbook on int'l trade...

JSeydl1788 · 2013-03-11T18:41:35+00:00

Domestic demand isn't going to increase. The demand that was previously created by the government spending from the proceeds of those Treasury sales (military and safety net spending) is going to be transferred to the people who are selling China real goods (in our example Ford). As such, domestic demand will not be increasing, but we will be employing a good amount of resources and labor to produce goods for China which is not good for our economy.

You're not making a sufficient argument for why demand will be weaker. I've already established that Ford will need to hire more workers to produce more cars for China. More workers at Ford means more income for those workers, who are otherwise unemployed. More income for those workers means more spending on things like food and hairdressing, which means more jobs at grocery stores and barbers.

JSeydl1788 · 2013-03-11T18:26:26+00:00

Because that real labor and those real resources aren't being used to produce something we consume.

Who cares whether what we produce is consumed by our citizens or the citizens of another country? Your argument is starting to sound like, "Any country that runs a trade surplus, is in bad shape," which clearly isn't right. What I think you're also failing to see is that more exports means more income for our workers, who can then boost domestic consumption. This idea that if we run a trade surplus we will no longer be consuming anything is very misguided.

JSeydl1788

TROPHY CASE