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Saturday, 17 February

17:00

The Weekend Quiz February 17-18, 2018 answers and discussion Bill Mitchell billy blog

Here are the answers with discussion for this Weekends Quiz. The information provided should help you work out why you missed a question or three! If you havent already done the Quiz from yesterday then have a go at it before you read the answers. I hope this helps you develop an understanding of modern monetary theory (MMT) and its application to macroeconomic thinking. Comments as usual welcome, especially if I have made an error.

Question 1:

If the growth in wages (the money you get paid) keeps pace with inflation which is accelerating at the same rate as labour productivity is growing then the wage share in GDP remains constant.

The answer is True.

The wage share in nominal GDP is expressed as the total wage bill as a percentage of nominal GDP. Economists differentiate between nominal GDP ($GDP), which is total output produced at market prices and real GDP (GDP), which is the actual physical equivalent of the nominal GDP. We will come back to that distinction soon.

To compute the wage share we need to consider total labour costs in production and the flow of production ($GDP) each period.

Employment (L) is a stock and is measured in persons (averaged over some period like a month or a quarter or a year.

The wage bill is a flow and is the product of total employment (L) and the average wage (w) prevailing at any point in time. Stocks (L) become flows if it is multiplied by a flow variable (W). So the wage bill is the total labour costs in production per period.

So the wage bill = W.L

The wage share is just the total labour costs expressed as a proportion of $GDP (W.L)/$GDP in nominal terms, usually expressed as a percentage. We can actually break this down further.

Labour productivity (LP) is the units of real GDP per person employed per period. Using the symbols already defined this can be written as:

LP = GDP/L

so it tells us what real output (GDP) each labour unit that is added to production produces on average.

We can also define another term that is regularly used in the media the real wage which is the purchasing power equivalent on the nominal wage that workers get paid each period. To compute the real wage we need to consider two variables: (a) the nominal wage (W) and the aggregate price level (P).

We might consider the aggregate price level to be measured by the consumer price index (CPI) although there are huge debates about that. But in a sense, this macroeconomic price level doesnt exist but represents some abstract measure of the general movement in all prices in the economy.

Macroeconomics is hard to learn because it involves these abstract variables that are never observed like the price level, like the interest rate etc. They are just stylisations of the general tendency of all the differen...

16:00

Australian Dollar and Bitcoin "IndyWatch Feed Crypto"

1.00 AUD = 0.00007 BTC
0.00010 BTC = 1.35 AUD
Converter

13:10

Legend Says This Is Going To Send The Price Of Gold Surging Above $2,000 "IndyWatch Feed Economics"

Legend Says This Is Going To Send The Price Of Gold Surging Above $2,000 from King World News With stock markets trading higher and the US dollar attempting to stabilize, today a legend in the business sent King World News a powerful...

The post Legend Says This Is Going To Send The Price Of Gold Surging Above $2,000 appeared first on The Daily Coin.

12:22

New blog We are all dead.

This blog is defunct.

Im now blogging on policy, politics, and data viz at mattcowgill.com and on Australian football at thearcfooty.com.

Thanks for reading.

06:44

Better to kick banks while they are up Crispin Hull

NOW that the banking Royal Commission is under way, it is a good time to reflect on the Australian financial system over the past decade and be grateful that we are kicking the banks while they are up, not down. Far better to have obscenely profitable banks than grotesquely bankrupt ones.

The popular mythology is that Australia was saved from the Great Recession of 2008 by Prime Minister Kevin Rudd and Treasurer Wayne Swan following Treasury advice to increase public spending and to get cash into peoples hands.

But that is only part of the story. Remember, the US Government did a similar thing, pushing $700 billion into the economy, but it did not save the US from recession. Similarly with Britain.

Rudd did the correct thing. It was a necessary thing to save us from recession, but of itself not sufficient. He was able to hand out the cash easily because the Howard Government had not totally squandered the proceeds of the mining boom on tax breaks for the well-off.

But more importantly, the real genesis of Australia dodging the recession was Paul Keating as Treasurer and Prime Minister bucking the US trend of permitting laissez-faire capitalism to capture the banking and financial system.

He made it clear he would not accept takeovers or mergers among the big four banks the four pillars. He also insisted on liquidity measures to help ensure the banks would stay afloat in the case of high defaults or a run.

Importantly, the banks went along with it. And the regulators, the Reserve Bank and the Australian Prudential Regulatory Authority, while not perfect, at least kept their eyes on the ball and the banks under scrutiny to ensure they had sufficient liquidity.

In the US, on the other hand, Republicans and Democrats laid the groundwork for a financially deadly cocktail the removal of regulation, as sought by Republicans, and the easing of credit vetting of the poor so they could get into the housing market, as sought by the Democrats.

This in turn led to the creation of a lot of sub-prime mortgages, no-doc loans and NINJA (No Income No Job) loans. The marketers got paid commissions on these so sold as many as possible and in 2005 started writing mortgages with enticing very low interest rates for the first two years before the real rate cut in.

These were on-sold to the banks and financial houses.

Then the newly freed banks entered the bond and derivative markets. They created new bonds by collecting bunches of sub-prime mortgages. The ratings agencies, Moodies and Standard &...

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Friday, 16 February

22:58

From Gibraltar to Australia: How Countries Approach ICOs "IndyWatch Feed Crypto"

With the boom in ICOs over the last year or so, there has been an increased need for regulation, however, with no global standard, different countries are taking different approaches. #INFOGRAPHICS

20:49

Weekend reads - must see articles of the week Pete Wargent Daily Blog

It's been some week!

I had an excruciatingly painful cracked tooth and a filling done, the humidity has been off the charts in Brisbane, but we got some good stuff done as well. 

In the end, there wasn'tmuch time left for sifting through the week's news.

Fortunately the must read pieces are summarised for you here at Property Update (or click the image below).


Subscribe for the free newsletter while you're there too. 

17:00

The Weekend Quiz February 17-18, 2018 Bill Mitchell billy blog

Welcome to The Weekend Quiz. The quiz tests whether you have been paying attention or not to the blogs I post. See how you go with the following questions. Your results are only known to you and no records are retained.

1. If the growth in wages (the money you get paid) keeps pace with inflation which is accelerating at the same rate as labour productivity is growing then the profit share in GDP remains constant.




2. The expansionary impact of deficit spending on aggregate demand is lower when the government matches the deficit with debt-issuance because then excess reserves are drained and the purchasing power is taken out of the monetary system.



3. A government is choosing between a tax cut that will reduce tax revenue at the current level of national income by $x (that is, increase private domestic disposable income by $x) and a public spending increase of $x. Which policy option will have the greater initial impact on aggregate spending?

...

16:00

Australian Dollar and Bitcoin "IndyWatch Feed Crypto"

1.00 AUD = 0.00008 BTC
0.00010 BTC = 1.30 AUD
Converter

09:32

Economics in Two Lessons John Quiggin

Ive finally committed to delivering a manuscript of my long-overdue book Economics in Two Lessons. As part of the process, Im going to post the chapters, one at a time, and ask for comments, criticism, encouragement and so on. To begin at the beginning, heres the Introduction.

08:44

A Cross-Strait Chill? You Wouldnt Know It From Taiwans Economic Data. Pacific Money The Diplomat

Taiwan posted higher-than-expected growth in 2017, and is predicting solid numbers for this year as well.

01:45

Astronomer Dr. Eamonn Ansbro An Update on Quantum Experiment to Contact ET "IndyWatch Feed Economics"

By Kerry Cassidy

I will be interviewed scientist and astronomer EAMONN ANSBRO about the status of his quantum experiment to contact ET.

Dr. Eamonn Ansbro has a Masters degree in Astronomy from University of Western Sydney, Australia, and an MPhil and PhD (ABD) degree in Astronomy from the Planetary Space Science Research Institute at Open University (UK).

He is director of Kingsland Observatory, one of 5 Observatory research centres in astronomy in Ireland. His main involvement for some years has been in Solar System studies and Instrumentation.

In recent years he has been involved in SETI . He founded SETI Kingsland which has been pioneering a fundamental new approach within SETI.

This new SETI approach has resulted in breakthrough technology for applying it to communications with extraterrestrial civilizations.

Visit Project Camelot to view the full 20 page PDF presentation.

Kerry Cassidy is the CEO/ Founder of Project Camelot. Kerry is a documentary filmmaker/investigative journalist and well known radio talk show host of Project Camelot Whistleblower Radio and Project Camelot TV broadcaster with a weekly live show on Youtube. Her website Project Camelot ( http://projectcamelot.tv aka projectcamelotportal.com ) is a leader in the alternative media sector, with a Youtube channel that has over 57 million unique viewers worldwide and over 185,000 sub...

00:00

Beyond the Crossing: Remote Viewing the Planet X Binary and Trinary System "IndyWatch Feed Economics"

Interesting information and worth a listen. Discernment advised, as always. Ed.

In this segment, we cover the impending passage of the binary system, what to expect, Spiritual and physical preparation aspects, Laudas first hand experiencing of the Holographic construct, the role of 5G + agendas, remote viewing a high level celebrity briefed on the system, an Australian astrophysicist kin confirmation disclosure + more!

Part 1

Part 2

Continuing from Part 1, we further discuss aspects of the Binary passage effects, the New earth, the TransPlanting, the elements of the antiverse/anti-creation + more personal witnessing of relative events.

We must emphasize that the El-ites do not invest trillions of dollars over decades building and expanding deep underground base networks for hoax events, irregardless of what technologies they may themselves employ as part of end time events.

Biblical plagues really happened say scientists

This article omits much, though is a reference point for examining the scientific studied effects that led to exodus.- GL http://www.telegraph.co.uk/news/scien

WORMWOOD.

This object goes by many names.. The Egyptians called it the Terrible Comet

The civilizations of South and Central American called it the Sky Serpent

The Hopi Indians called it Sasquasohah

The Babylonians called it Marduk

The Chinese called it The Red Dragon

The Sumerians called it Nibiru or Planet of the Crossing.

Other civilizations called it The Winged or Horned Disk, The Destroyer, The Death Comet among others.

...

Thursday, 15 February

23:35

Waste Expo Australia/ All- Energy 2018 "IndyWatch Feed Economics"

Waste Expo Australia 2017 is proudly co-located with All-Energy Australia as part of Australian Sustainability Week, forming Australia's most significant showcase for the Waste, Recycling, Environment, Sustainability, Water Management, Clean Energy and Energy Efficiency industries.

IndyWatch Australian Economic News Feed Archiver

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