As such, real GDP provides a better basis for judging long-term national economic performance than nominal GDP. Using aGDP price deflator, real GDP reflects GDP on a per-quantity basis. Without real GDP, it would be difficult to identify just from examining nominal GDP whether production is ...
A wage-price spiral is a macroeconomic theory that explains the cause-and-effect relationship between rising wages and rising prices, which leads to inflation.
My problem with Chinese investment in the electric car industry had nothing to do with my superior knowledge of the prospects for the industry (I have none). It had mostly to do with my basic instinct that risky high-technology ventures are not best funded and directed by companies, industrie...
Explain the theory of consumer choice and how it involves consumers using trade-offs to make decisions and respond to changes in their environment. Explain how to apply the economic term "comparative advantage" to the consumer market. Explain the importance of taking...
If the future turns out to be a garden of roses then I’ll enjoy that when the time comes. Don’t get your nominal and real returns mixed up. If your calculator includes an assumption for inflation, then feed in a nominal return which incorporates that inflation number along with your ...
investment, leading to a 0.1% lift to real GDP in 2026 and a cumulative boost of 0.2% in 2027. This implicitly assumes a fiscal multiplier of 40 cents on the dollar in the first year – meaning that for every dollar in tax cuts there is a commensurate 40 cents increase in nominal...
It’s because he has a debt-driven mindset on what’s going on with the economy rather than an income-driven mindset. Similarly, I think people are trying to find is it interest income which is relatively de minimis in the grand scheme of an economy that’s booming. They’re searching...
What do you think the risks are of a price/wage spiral? Annualized CPI so far in 2021 has been 7.4%. Job openings are at record highs, and plenty of establishments I frequent don’t have workers. A place I go to brunch had to close because it couldn’t find help. ...
So this is a critical point because we now are hearing countless stories of graduates saddled with debt and unable to find jobs that pay well. Is this is new problem? The problem of fresh graduates having a tough time early on isn’t a new problem per se but when you...
Figure 1 shows the rate of change of the CPI and unemployment rates in the 1960s. If unemployment was 6%—and through monetary and fiscal stimulus, the rate was lowered to 5%—the impact on inflation would be negligible. In other words, with a 1% fall in unemployment, prices would not...