abu yahya's definitions
*noun*; in Keynesian economics, the rate at which aggregate consumption rises in response to a rise in national income.
For example, suppose the marginal propensity to consume (MPC) is 0.95. If the national income is 100 billion dollars, and it rises 10%, then consumption will rise by 9.5 billion, and saving will rise by 0.5 billion.
If this theory is correct, then an expanding economy will suffer insufficient demand for its own output, and a recession will be inevitable.
This is why national governments respond to recessions with deficit spending: they are trying to counteract the MPC's effect on aggregate demand, and bring it in line with potential output.
For example, suppose the marginal propensity to consume (MPC) is 0.95. If the national income is 100 billion dollars, and it rises 10%, then consumption will rise by 9.5 billion, and saving will rise by 0.5 billion.
If this theory is correct, then an expanding economy will suffer insufficient demand for its own output, and a recession will be inevitable.
This is why national governments respond to recessions with deficit spending: they are trying to counteract the MPC's effect on aggregate demand, and bring it in line with potential output.
Not only is the marginal propensity to consume weaker in a wealthy community, but, owing to its accumulation of capital being already larger, the opportunities for further investment are less attractive...
J.M. Keynes, *The General Theory of Employment, Interest, and Money* (1936), Ch.3
J.M. Keynes, *The General Theory of Employment, Interest, and Money* (1936), Ch.3
by Abu Yahya March 3, 2009
Get the marginal propensity to consume mug.*noun*; a subdivision of economics that focuses on addressing recessions by stimulating supply, rather than demand. During a recession, supply siders recommend cutting taxes rather than increasing government spending.
"Supply side" is in contrast to traditional practitioners of Keynesianism, "demand siders" who believe the main fiscal policy tool for recessions should be increased government spending.
Both supply siders and demand siders believe the government is responsible for formulating effective fiscal policy during recessions.
The most famous advocate of supply side economics was Arthur Laffer.
"Supply side" is in contrast to traditional practitioners of Keynesianism, "demand siders" who believe the main fiscal policy tool for recessions should be increased government spending.
Both supply siders and demand siders believe the government is responsible for formulating effective fiscal policy during recessions.
The most famous advocate of supply side economics was Arthur Laffer.
When Ronald Reagan ...promised to cut taxes ...he claimed tax revenue would go up, not down... as the economy boomed in response to lower rates. Since then, supply side economics ... has become a central tenet of Republican political and economic thinking in the country.
"McCain sticks to Supply Side Economics..." *International Herald Tribune* (24 March 2008)
"McCain sticks to Supply Side Economics..." *International Herald Tribune* (24 March 2008)
by Abu Yahya March 5, 2009
Get the Supply Side Economics mug.(JOURNALISM) using flattery to gain access to sources. The phrase is usually used in the context of White House or Congressional press corps, who use fulsome praise of high-ranking officials whose favor they need. Usually, officials like to be publicly represented as magnificent, selfless, tireless public servants; in exchange for such blurbs, they may invite specific reporters to exclusive events, thereby boosting the reporter's status.
It's actually been a feature of the business press for ages.
It's actually been a feature of the business press for ages.
Since the financial crisis of 2008, business reporters have tended to write dismissively of bank executives. Six years ago they were likely to have written a beat sweetener about some CEO who was now shithead-of-the week.
by Abu Yahya April 9, 2010
Get the beat sweetener mug.(MATHEMATICS) a function of numbers that are the root of a base. For example, log(base 2) means a function of numbers that are the numbered roots of 2. The log(base 2) of 2 is 1, meaning 2 raised to the power of 1 is 2 (2^1 = 2); log(2) of 4 is 2, and so on.
The idea here is that any number can be expressed as 2 raised to some power; better still, if you do math with the logs of a number rather than the numbers themselves, you can find useful patterns. For example, if you are graphing population growth, and you just plot the raw number of people over time, you aren't going to notice anything in particular. If you plot the log of population, you can see that, while population is growing, the rate of growth is falling.
Usually, if you are doing statistical research with numbers that always have to be positive (like population, death tolls from diseases, etc.), you need to use logarithms for the numerical values in order to represent a confidence interval.
Logs usually have a base of e or 10. Logs with a base of e are called natural logs.
The idea here is that any number can be expressed as 2 raised to some power; better still, if you do math with the logs of a number rather than the numbers themselves, you can find useful patterns. For example, if you are graphing population growth, and you just plot the raw number of people over time, you aren't going to notice anything in particular. If you plot the log of population, you can see that, while population is growing, the rate of growth is falling.
Usually, if you are doing statistical research with numbers that always have to be positive (like population, death tolls from diseases, etc.), you need to use logarithms for the numerical values in order to represent a confidence interval.
Logs usually have a base of e or 10. Logs with a base of e are called natural logs.
by Abu Yahya April 23, 2010
Get the logarithm mug.(EU GOVERNMENT) agency of the European Union that publishes harmonized statistics for the 27 member states of the EU. The EU does not collect the statistics, but reviews and edits statistics collected by its member states so that the data is comparable for all of the countries in it.
BILL: I'm blogging about the economy of Europe, but I don't know what the economic indicators are. You know, the unemployment rate, the inflation rate, hours worked, and so on.
ANNA: Go to the Eurostat web page. It's really awesome!
ANNA: Go to the Eurostat web page. It's really awesome!
by Abu Yahya July 15, 2010
Get the Eurostat mug.(ECONOMICS) the lowest interest rate available to non-financial borrowers.
Banks can borrow money from the Federal Reserve System or each other at the lower federal funds rate--and they borrow money from depositors at lower rates still.
Banks can borrow money from the Federal Reserve System or each other at the lower federal funds rate--and they borrow money from depositors at lower rates still.
The most widely-quoted estimate of the prime rate is that published by the Wall Street Journal (from a survey of the 30 largest banks).
by Abu Yahya September 6, 2010
Get the prime rate mug.The belief efforts to protect people from calamity will only lead to them being more careless, and bringing on more calamity.
This is a fallacy because it (a) assumes people can adjust personal risk to replicate an incomparable situation, and (b) it confusing risk-taking and risky behavior. "Risk-taking" is a neutral term that includes anything that increases risk in some way, such as operating a machine at a higher speed. This usually is done to get some other benefit. "Risky behavior" is foolish, feckless, or sloppy behavior that has no intrinsic utility to the person engaging in it.
This is a fallacy because it (a) assumes people can adjust personal risk to replicate an incomparable situation, and (b) it confusing risk-taking and risky behavior. "Risk-taking" is a neutral term that includes anything that increases risk in some way, such as operating a machine at a higher speed. This usually is done to get some other benefit. "Risky behavior" is foolish, feckless, or sloppy behavior that has no intrinsic utility to the person engaging in it.
An example of the curmudgeon's fallacy is the erroneous claim that safer cars make for careless drivers.
by Abu Yahya October 19, 2008
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