MacroEconomics (CT)
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Econometer: Will we be better off in 2014?

Econometer: Will we be better off in 2014? | MacroEconomics (CT) | Scoop.it
Consensus among U-T's 16 economists and CEOs is yes.
Ed Cox's insight:

Just like the Monetary Policy comittee in the UK, this group of Economists have a large consensus by a 14/1 marginal, but that one person has very valid points.

 

"With the U.S. staying on course to overspend and borrow from the future, not for investment but continuing to consume, the economy grows ever more vulnerable and subject to much greater and eventual inevitable correction. With the Fed continuing quantitative easing and maintaining low interest rates, the dollar will eventually collapse causing even more damage to the U.S. economy. Creditors will eventually force necessary financial discipline that elected leaders refuse to face. That discipline will result in a sovereign debt and currency crisis sending consumer prices soaring, pushing the economy deeper into recession, and exerting massive upward pressure on interest rates."

 

He argues that a combination of devaluing the currency by Quantitive Easing along with making access to money easier via loans is just fueling consumption and not causing people to invest and increase the productive potential of the economy, and thus as Quantiative Easing and Low Interest Rates cannot go on forever, they're just doing something that has short term benefits for AD, but no accompanying increase in LRAS, so when everything goes back to normal, the US will be behind where it could possibly be.

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Greece in the Caribbean

Greece in the Caribbean | MacroEconomics (CT) | Scoop.it
IT WILL not be long till Congress and the White House start squabbling again about the budget in Washington, DC. But before they create another artificial debt...
Ed Cox's insight:

In Puerto Rico, the amount they owe far outstrips the amount they are able to put in from their GDP to pay it off.

 

They're very ineficient, and the market is dominated by the Governement Sector, which means they aren't drawing in more money and borrowing is spiralling, being only propped up by the US Government over the years, and the incentives were being taken advantage of by the criminal underworld, meaning they've been withdrawn, futhur damaging the economy.

 

- Black Market affecting Legitmate Market

- Demand for their products going down as other better products available due to increased efficiency

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'Solid' growth in UK manufacturing

'Solid' growth in UK manufacturing | MacroEconomics (CT) | Scoop.it
The UK's manufacturing sector continued to grow strongly in October, according to a closely-watched survey.
Ed Cox's insight:

Export Orders increase our GDP.

 

Actual supply increases as the price mechanism tells manufactuers to make more as demand has increased. To fufill this new demand there must be 'further job creation'.


Prices of the products could've gone up due to demand-pull inflation, or the product prices might've been kept artificially lower in order to stimulate demand in the long term, and they'd raise prices later.

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