by Philip Pilkington
There has been some reticence on the blogs to discuss Thirlwall’s Law and I myself have also been somewhat reluctant to deal with it in any great detail (although I did hint at some problems with it in this post). I think it might be worth discussing it in more depth, however, because I think that the model it is based on is actually quite interesting — albeit misleading. I will rely for this exposition on a very succinct account of the model in a recent paper by Thirlwall entitled Kaldor’s 1970 Regional Growth Model Revisited.
February 10th, 2017
by John Mauldin, Thoughts from the Frontline
Vizzini: He didn’t fall?! Inconceivable!
Inigo Montoya: You keep using that word. I do not think it means what you think it means. – From The Princess Bride
“A tariff is a scale of taxes on imports, designed to protect the domestic producer against the greed of his consumer.” – Ambrose Bierce
“Vast possibilities matured into realities before their very eyes. Nevertheless, they saw nothing but cramped economies struggling with ever-decreasing success for their daily bread.” – Joseph Schumpeter on the Industrial Revolution
Prepared by the Bureau of Economic Analysis of the Department of Commerce, the Gross Domestic Product (GDP) serves primarily as an accounting function for the United States government ̶ one statement in a description of national accounts. By summarizing the monetary value and sources of services and production, the GDP reports all expenditures in the U.S.economy. Anxiously awaited, the economic statistic is employed to indicate and forecast the health of an economy. However, the GDP tends to be misinterpreted, ambiguously defined, and improperly used. Is there more to its well-arranged numbers than invigorating government officials and encouraging investors?
by Philip Pilkington
In a recent post Lord Keynes raises the question of the so-called ‘law’ of diminishing marginal utility. The ‘law’ states that we will derive ever diminishing satisfaction from the acquisition of a good or service. Lord Keynes notes that this is true for some goods — like washing machines — but may not true of others. He gives a number of examples — such as addictive arcade games and drugs — that seem to defy the ‘law’.
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