A recession is a decrease in total production. There are two possible reasons why this could happen. One is a decrease in aggregate supply caused be a decrease in productivity and the other is a decrease in aggregate demand caused…
Blog Archives
The Median American Is Poorer Then The Median In Other Rich Countries
In my last post, I argued that the median American has tolerated the rise in inequality partly because median consumption has been temporarily buoyed by rising indebtedness. Here is one data point from Kenneth Thomas, the author of the Middle…
Posted in Medianism
Does The Median American Care About Median Income? Does The Median Even Know?
John Cassidy put together some recent findings on inequality and showed a famous chart from Emmanuel Saez, of Berkeley, of the share of pre-tax income enjoyed by the top 1% richest earners in America compared with everyone else. The basic story…
Monetary Policy for the People
Many economists have blamed Alan Greenspan for creating the housing bubble by keeping interest rates too low. This is wrongheaded. As Blinder’s excellent new book explains, low interest rates only contributed slightly to the housing bubble which was mainly caused…
Weekend Dimmeu, Foodie Edition
Economists frequently dismiss diminishing marginal utility (dimmeu) of wealth for ethical and political concerns, but it is hard to avoid the concept when you start looking at the world. For example, the poorest people cannot afford to pay people to…
Small Is Ugly!
Updated February 2023. In the 1970s, one of the most popular books about economics and business was Small Is Beautiful by E. F. Schumacher. The book makes many valid points, but the title is misleading to suggest that small businesses are best.…
Posted in Development, Globalization & International
The Fed’s Primary Aim Is Helping The Banks
John Cassidy has an excellent article about the banking industry, but I quibble with his ending: Helping the banks isn’t the Fed’s primary aim, of course. Ben Bernanke’s monetary policy was designed to stimulate the over-all economy… But one of its…
Medianism 