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« David Davis insists that he can still win leadership | Main | Is 'National Service' David Cameron's big idea? »

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a-tracy

'that's not economics' do you have any examples of what you are claiming, because most of our customers maintain the opposite. Wage increases appear to be caused by skill shortages and high benefits and high comparative wages in the public sector.

On the house price increase issue, if there is no extra money then prices won't increase because sales won't be made, without the supply of money there is no sale.

that's not economics

I recommend 'Economics in One Lesson' by Henry Hazlitt:

http://www.amazon.com/gp/product/0517548232/104-2708831-3651913?v=glance&n=283155&v=glance

It is a highly readable quick explanation of how prices, wages, profits, inflation, minimum wages etc work (and don't work).

a-tracy

Thank you so much, out of interest do you run your own business?

Rick

Posted by: that;s not economics | 29 November 2005 at 15:17


You are economically illiterate. I suggest you read up on Liquidity and try Don Patinkin and Harry G Johnson for starters. But since you are into the very basic stuff, try looking at Irving Fisher's Equation PV = MT.

Rick

More money in the system to buy things (eg because more people are working) doesn't cause an increase in price over and above the general level of prices in the economy unless there are restrictions on supply


ONLY Governments create Money - if monetary growth is lower than economic output, output contracts in the next cycle.......all central bankers have done since the Millennium Bug Scam is to inject liquidity into the banking system to prevent collapse...............then when Y2K did not occur the funds fed the speculative Dot-com Boom.

As that burned out when P/E ratios became absurd, Greenspan pumped in more liquidity to stop a Market collapse...........and thus fed the housing and LBO boom. The Housing Boom fed the asset-backed lending boom as people re-mortgaged and you got Keynesian Demand Management using private-sector debt.

It all comes down to the Hog Cycle or Cobweb Theorem and the downstroke cannot be far off. The trade-gap shows the effect of an over-stimulated economy - the US has the world's biggest deficit and Britain is No2

Rick

They are not the same as an increase in the overall price level. Indeed, the fact that they take place when inflation is low makes this obvious.

This is fatuous. Each and every price is an Input - what we Economists call a Factor of Production. If you are seriously stating that increased prices of a) Petrol b) Gas c) Housing d) Transport do not affect the general price level and increase cost-push pressures, I suggest you buy yourself a proper textbook and stop skim-reading.

Rick

evel of prices in the economy unless there are restrictions on supply

This is nuts. We have someone here who thinks Supply (ie Marginal Cost) Curves are flat and Demand Curves (Marginal Revenue) are upward sloping. This is the textbook example of the mineral spring with no costs of production.

that's not economics lives up to his name. This is pure ideological nonsense - all resources are scarce and Utility Functions are there to delineate preferences. Land is a finite resource and only a developer wants to concrete the lot even if it diminishes the Utility of those whose Consumption includes enjoying green spaces.

The ideologue with his Henry Hazlitt fixation does not understand that other people have Wants which conflict with his own; that too is a Supply Constraint because other people want to prevent you over-consuming what they want to conserve.

that's not economics

"Thank you so much, out of interest do you run your own business?"

Yes, but that doesn't make someone more knowlegable about economics

Rick: I think the server miscoloured those posts black from the original green ink.

Rick

Rick: I think the server miscoloured those posts black from the original green ink.

Dream on little one........and don't blame Apache.

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