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Comments on: Careful with the paradox of thrift http://www.tvhe.co.nz/2009/07/08/careful-with-the-paradox-of-thrift/ The Visible Hand in Economics Wed, 15 Jul 2009 03:08:16 +0000 hourly 1 https://wordpress.org/?v=6.9.4 By: TVHE » RBNZ inconsistency http://www.tvhe.co.nz/2009/07/08/careful-with-the-paradox-of-thrift/#comment-20365 Wed, 15 Jul 2009 03:08:16 +0000 http://www.tvhe.co.nz/?p=4019#comment-20365 […] rising sharply, which is a wasted resource, and will thereby reduce national income – paradox of thrift style.  The second concern is based on the medium term, they believe that the consumption share of GDP […]

]]> By: TVHE » On penalty cash rates http://www.tvhe.co.nz/2009/07/08/careful-with-the-paradox-of-thrift/#comment-20329 Mon, 13 Jul 2009 04:36:03 +0000 http://www.tvhe.co.nz/?p=4019#comment-20329 […] Now, because prices aren’t properly aligned we (are assuming that we) have a situation where a lack of demand is leading to a situation where markets don’t clear – if we could increase spending we could increase income and this would lead to a superior outcome. This is our paradox of thrift. […]

]]> By: Internet Marketing IQ http://www.tvhe.co.nz/2009/07/08/careful-with-the-paradox-of-thrift/#comment-20327 Mon, 13 Jul 2009 04:07:02 +0000 http://www.tvhe.co.nz/?p=4019#comment-20327 I am a USA Citizen and surprisingly I went to College. Along the way I learned a little bit about the “Invisible Bankers” (Insurance Companies), and the Central Bank (Federal Reserve). The average American Citizen is absolutely clueless as how the Federal Reserve works and who is really in control. The Obama administration is full of Wall Street Appointees. It’s a do as I say not as I do administration. Sad, but it would be the same had his opponent one. And you can statistically model any financial problem to death, but you will not arrive at the root cause until you look deep into the deception. Unemployment numbers do not reflect the people who are no longer drawing benefits, were fired (A whole lot of companies will deny benefits even to those laid off), and the under employed.

USA citizens are slaves to debt and once the jobs collapse the defaults begin and the fear escalates. Who is going to pay the $35 billion in dismissed GM debt that is owed to all the small business who feeds their corporate machine? It just goes on and on. But the bottom line is until the Central Bank is eliminated and the credit markets are allowed to open up the devastation and slide will continue.

]]> By: Dizi izle http://www.tvhe.co.nz/2009/07/08/careful-with-the-paradox-of-thrift/#comment-20322 Sun, 12 Jul 2009 21:37:37 +0000 http://www.tvhe.co.nz/?p=4019#comment-20322 @Greg Ransom
Are you paying your taxes %100 legally? You should think twice about it 😉

]]> By: Adventurous Wench travel store http://www.tvhe.co.nz/2009/07/08/careful-with-the-paradox-of-thrift/#comment-20320 Sun, 12 Jul 2009 18:28:57 +0000 http://www.tvhe.co.nz/?p=4019#comment-20320 I think people are saving up for an emergency reserve fund to avoid using credit cards for unexpected expenses like medical bills or job loss. A smaller chunk goes to debt servicing.

]]> By: lida diyet zayıflama r10seoogle http://www.tvhe.co.nz/2009/07/08/careful-with-the-paradox-of-thrift/#comment-20312 Sat, 11 Jul 2009 14:08:28 +0000 http://www.tvhe.co.nz/?p=4019#comment-20312 We live in California. The first wave has already hit …

]]> By: steupz http://www.tvhe.co.nz/2009/07/08/careful-with-the-paradox-of-thrift/#comment-20308 Sat, 11 Jul 2009 07:25:19 +0000 http://www.tvhe.co.nz/?p=4019#comment-20308 Well I don’t think Krugman was conclusive in his description. He seemed to suggest the paradox was looming as consumers weighed down by high interest credit card debt, inevitably rein themselves in.

The thing about that though, is, are people actually saving or paying off debt? And will these payments have any effect.
I think the paradox might be that consumers may actually service their debt during this recession in greater numbers than we foresaw.

]]> By: Matt Nolan http://www.tvhe.co.nz/2009/07/08/careful-with-the-paradox-of-thrift/#comment-20292 Thu, 09 Jul 2009 20:50:15 +0000 http://www.tvhe.co.nz/?p=4019#comment-20292 @Jim Rome

U-6 unemployment is an exaggeration – as it also captures people in the labour force who do not want to work at the current wage. While it is important to figure out how much labour is underutilized (they do that in NZ) we have to be careful not to mis-specify it.

“Indeed, unemployment is accelerating, and so by the end of this year, unemployment could be even higher.”

Yes, unemployment will keep rising even when the economy has stopped contracting as firms move back towards full time staff and reinvest in capital.

However, hours worked will be the series to look at. It looks terrible at the moment – but once that starts to pick up things will be looking better.

]]> By: Jim Rome http://www.tvhe.co.nz/2009/07/08/careful-with-the-paradox-of-thrift/#comment-20287 Thu, 09 Jul 2009 09:59:16 +0000 http://www.tvhe.co.nz/?p=4019#comment-20287 Remember, that these figures are calculated using U-3. The U-6 unemployment numbers for some of these states probably exceeds 20%, which is substantially higher than the numbers for the comparable period of 1930 (today is comparable to 1930 because we are one year or less into the current financial crisis). Indeed, unemployment is accelerating, and so by the end of this year, unemployment could be even higher.

]]> By: Did you see the one about . . . « Homepaddock http://www.tvhe.co.nz/2009/07/08/careful-with-the-paradox-of-thrift/#comment-20285 Thu, 09 Jul 2009 01:56:58 +0000 http://www.tvhe.co.nz/?p=4019#comment-20285 […] Careful with the paradox of thrift at The Visible Hand in Economics […]

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