Debtor Nation: A nation that owes more to foreign governments, businesses, and consumers than foreigners owe to domestic governments, businesses, and consumers. The United States, having been a creditor nation for many decades, has now achieved the status of debtor nation. This sort of thing happens when exports are less than imports, creating a deficit in the current account of the balance of payments and thus a surplus in the capital account.

Demand-Pull Inflation: Demand-pull inflation places responsibility for inflation squarely on the shoulders of increases in aggregate demand. This type of inflation results when the four macroeconomic sectors (household, business, government, and foreign) collectively try to purchase more output that the economy is capable of producing. In general, increasing aggregate demand means buyers want more production than the economy is able to provide. Then end result is that buyers bid up the price of existing production. The extra demand "pulls" the price level higher. You might want to compare demand-pull inflation with cost-push inflation.

Demand Shock: A disruption of market equilibrium (that is, a market adjustment) caused by a change in a demand determinant and a shift of the demand curve. A demand shock can take one of two forms–an Demand Increase or a Demand Decrease. An increase in demand is seen as a rightward shift of the demand curve and results in an increase in equilibrium quantity and an increase in equilibrium price. A decrease in demand is a leftward shift of the demand curve and results in a decrease in equilibrium quantity and a decrease in equilibrium price.

Diamond-Water Paradox: The perplexing observation that water, which is more useful than diamonds, has a lower price. If price is related to utility, how can this occur? This paradox was first proposed by classical economists in the 19th century and was subsequently used as a stepping stone for developing the notion of marginal utility and the role it plays in the demand price of a good. The paradox is magically cleared up with an understanding of marginal utility and total utility. People are willing to pay a higher price for goods with greater marginal utility. As such, water which is plentiful has enormous total utility, but a low price because of a low marginal utility. Diamonds, however, have less total utility because they are less plentiful, but a high price because of a high marginal utility.

Dismal Science: A term for the study of economics developed during the late 18th and early 19th century when economists concluded that continued population growth would push wages and living standards to a minimal subsistence level and keep them there. It persists to the present time because economics continue to point out that actions result in opportunity cost, that nothing is free, and that eventually society has to pay the price for what it does.

All definitions were provided by: AmosWeb

contact me

Popularity: 6%

  • Share/Bookmark

Weekly Favorites – 09/28/2009

Market Update – Calculated Risk

Fannie Mae Serious Delinquency Rate Increases Sharply – Calculated Risk

New Income Inequality Data: Surprising and Frightening – Economist’s View

Economic History and Modern Macro: What Happened? – Grasping Reality With Both Hands

Macroeconomic Policy For A Stronger Recovery – Grasping Reality With Both Hands

Crowding In – Paul Krugman

The Textbook Economics of Cap-and-Trade – Paul Krugman

The Money Culture War – Bad Money Advice

Entrepreneurship At Its Finest: Why We Need Them – Carpe Diem

Markets In Everything: Fantasy Sports Insurance – Carpe Diem

Wanted: Economic Advice from Student (Reward!) – Freakonomics

A Painless Way to Learn Economics – Greg Mankiw’s Blog

Is There a Healthcare Crisis – Greg Mankiw’s Blog

Progress – Marginal Revolution

contact me

Popularity: 6%

  • Share/Bookmark

Four People With Super Memory

brain

By: David K Israel

http://blogs.static.mentalfloss.com/blogs/archives/34971.html

What if you finished reading this article and remembered every detail of it for the rest of your life? That’s the problem people with super-autobiographical memory face—and yes, it’s often referred to as a problem, not a gift. Their minds are like a computer hard drive that retains everything: dates, middle names, license plate numbers, even what they eat for lunch on a daily basis There are only four confirmed super memory cases, a disorder experts say is somewhat related to OCD, though no doubt there are plenty others who haven’t been identified yet.

So who are the four individuals who’ve all recently been the subject of a study at the Center for the Neurobiology of Learning and Memory at the University of California, Irvine.? Let’s meet them and find out…

http://blogs.static.mentalfloss.com/blogs/archives/34971.html

contact me

Popularity: 6%

  • Share/Bookmark
Tagged with:
 

America armed, but guns not necessarily loaded

By MARY FOSTER, Associated Press Writer Mary Foster, Associated Press Writer Wed Sep 23, 2:51 pm ET

NEW ORLEANS – Bullet-makers are working around the clock, seven days a week, and still can’t keep up with the nation’s demand for ammunition.

Shooting ranges, gun dealers and bullet manufacturers say they have never seen such shortages. Bullets, especially for handguns, have been scarce for months because gun enthusiasts are stocking up on ammo, in part because they fear President Barack Obama and the Democratic-controlled Congress will pass antigun legislation — even though nothing specific has been proposed and the president last month signed a law allowing people to carry loaded guns in national parks.

Gun sales spiked when it became clear Obama would be elected a year ago and purchases continued to rise in his first few months of office. The FBI’s National Instant Criminal Background Check System reported that 6.1 million background checks for gun sales were issued from January to May, an increase of 25.6 percent from the same period the year before.

"That is going to cause an upswing in ammunition sales," said Larry Keane, senior vice president of the National Shooting Sports Foundation, a trade association representing about 5,000 members. "Without bullets a gun is just a paper weight."

The shortage for sportsmen is different than the scarcity of ammo for some police forces earlier this year, a dearth fueled by an increase in ammo use by the military in Iraq and Afghanistan.

"We are working overtime and still can’t keep up with the demand," said Al Russo, spokesman for North Carolina-based Remington Arms Company, which makes bullets for rifles, handguns and shotguns. "We’ve had to add a fourth shift and go 24-7. It’s a phenomenon that I have not seen before in my 30 years in the business."

Americans usually buy about 7 billion rounds of ammunition a year, according to the National Rifle Association. In the past year, that figure has jumped to about 9 billion rounds, said NRA spokeswoman Vickie Cieplak.

Jason Gregory, who manages Gretna Gun Works just outside of New Orleans, has been building his personal supply of ammunition for months. His goal is to have at least 1,000 rounds for each of his 25 weapons.

"I call it the Obama effect," said Gregory, 37, of Terrytown, La. "It always happens when the Democrats get in office. It happened with Clinton and Obama is even stronger for gun control. Ammunition will be the first step, so I’m stocking up while I can."

So far, the new administration nor Congress has not been markedly antigun. Obama has said he respects Second Amendment rights, but favors "common sense" on gun laws. Still, worries about what could happen persist.

Demand has been so heavy at some Walmarts, a limit was imposed on the amount of ammo customers can buy. The cutoff varies according to caliber and store location, but sometimes as little as one box — or 50 bullets — is allowed.

At Barnwood Arms in Ripon, Calif., sales manager Dallas Jett said some of the shortages have leveled off, but 45-caliber rounds are still hard to find.

"We’ve been in business for 32 years and I’ve been here for 10 and we’ve never seen anything like it," Jett said. "Coming out of Christmas everything started to dry up and it was that way all through the spring and summer.

Nationwide, distributors are scrambling to fill orders from retailers.

"We used to be able to order 50 or 60 cases and get them in three or four days easy, it was never an issue," said Vic Grechniw of Florida Ammo Traders, a distributor in Tampa, Fla. "Now you are really lucky if you can get one case a month. It just isn’t there because the demand is way up."

A case contains 500 or 1,000 bullets.

At Jefferson Gun Outlet and Range in Metairie just west of New Orleans, owner Mike Mayer is worried individuals are going to start buying by the case.

"If someone wants to shoot on the weekend you have to worry about having the ammunition for them. And I know some people aren’t buying to use it at the range, they’re taking it home and hoarding it."

With demand, prices have also risen.

"Used to be gold, but now lead is the most expensive metal," said Donald Richards, 37, who was stocking up at the Jefferson store. "And worth every penny."

http://news.yahoo.com/s/ap/20090923/ap_on_re_us/us_ammo_shortage

contact me

Popularity: 5%

  • Share/Bookmark
Tagged with:
 

Caveat Emptor -  a handy little Latin term meaning to "let the buyer beware." It’s a warning to buyers that sellers will try to extract a high price for low-quality stuff, and a heed that every hardworking consumer of the third estate should take. If you find you’ve been "taken", note that government has established consumer protection guidelines that businesses are legally compelled to follow. As such, you can seek action through the Federal Trade Commission, Consumer Product Safety Commission, your state attorney general, and in all likelihood your local police department.

Caveat Venditor – This is a Latin term meaning "let the seller beware." It was developed as a counter to the buyer’s warning, caveat emptor, and suggests that sellers too can be "taken to the cleaners" in a market transaction. While it’s less important than caveat emptor to under appreciated consumers, it does surface from time to time.

Ceteris Paribus - A Latin term meaning that all other factors are held unchanged. The ceteris paribus assumption is used to isolate the effect one economic factor has on another. Without this assumption, it would be difficult to determine cause and effect in the economy. Relaxing the ceteris paribus assumption is the primary analytical technique used in the study of economics, especially when analyzing the market. Much like a chemist adds one chemical at a time to a mixture to determine the resulting reaction, an economist relaxes one ceteris paribus assumption at a time to observe the results.

Classic Economics - A body of economic thought originating with the work of Adam Smith based on the idea that the operation of unrestricted markets generates aggregate or national production that fully utilizes the economy’s resources and maintains full employment. The three primary assumptions of classical economics are flexible prices, Say’s law, and the saving-investment equality.

Crowding Out - A decline in investment caused by expansionary fiscal policy. When government counteracts a recession with an increase in spending or a reduction in taxes (both resulting in an increase in the federal deficit) interest rates tend to increase. Higher interest rates then inhibit business investment in capital goods. Some pointy-headed economists argue that investment crowding out completely offsets any intended expansionary policy, but the jury’s still out on this one. To the extend that crowding out occurs, economic growth is reduced if (and this is an important if) government has not seen fit to offset the loss in business investment with public investment in infrastructure, education, or other growth promoting expenditures.

All definitions were provided by AmosWeb

contact me

Popularity: 7%

  • Share/Bookmark

What Makes a Good Economist

MB: What makes a good economist? Last week there were several posts in the blogosphere debating the success of current economists and the usefulness of the field? Some economists such as David Levine from Washington University claim that there have been great developments in economics over the last several decades; while other economists such as Paul Krugman state that “Few economists saw our current crisis coming, but this predictive failure was the least of the field’s problems”. Despite all of the accusations on either side of the debate, there is a more important issue that needs to be addressed for future economists and that is; what makes a good economist?

Professor of Economics at Harvard University, Greg Mankiw gives advice to aspiring economists, he suggests taking as many math courses as possible in undergrad studies, follow economic news, read economics for fun, and attend economic research seminars if possible. There is no arguing that young economists that are actively involved in the field will become more educated. Furthermore suggestions to become a better economist are seemingly endless, one individuals perspective on what makes a good economist is likely to be different than another’s.

So I set out to find evidence on what characteristics make up a good economist. As expected with a Google search I was bombarded with a number of vague indecisive theories on what makes a good economist. Rather than simply doing a Google search and reading other peoples theories on the topic, I decided to analyze the characteristics of notable, reputable, and successful economists.

In doing so I found an assortment of similarities between the economists; first and most obvious was that they are all very intelligent. There is no arguing that intelligence is a contributing factor to success in any field; with this said and its blatancy I decided not to include intelligence as the primary characteristic of a good economist.

In addition to intelligence one must have a deep passion for the dismal science, constant analysis of data, news and other relevant information is crucial to the success of an economist; however, yet again I do not feel that passion is the primary source of success.

Though intelligence and passion are key characteristics of a successful economist, I found that there was one other that stood out more than these two. The ability for an individual to see economics in everything is the primary characteristic of a successful economist. I challenge anyone to look around the room they are in right now and find something in it that cannot be related to economics or the economy (national or global).

For example the majority of people will look at their pencil as a writing utensil, which it is, but a good economist will look at a pencil and see not just a tool for writing but markets and industries, they will think of how the product was manufactured and where. They will take this information and analyze the markets that contributed to the making of the pencil and determine the impact the pencil has on the economy; the history of the markets, their cycles and future are all taking into consideration. This ability to see the economy in everything is not a characteristic that all economist have, however it is a characteristic that all “good” economist have.

I have concluded that there are three characteristics that make a good economist, intelligence, passion, and most essential the ability to see the economy in everything.

In further defense of economists, inaccurate predictions do not mean that economists are bad or invaluable; it simply means that it is the dismal science and is often unpredictable due to the number of uncertain variables. Seeing economics in everything reduces the number of uncertain variables allowing economists to make better more accurate predictions.

contact me

Popularity: 13%

  • Share/Bookmark

Weekly Favorites – 09/21/2009

What do children remember from a museum? – Marginal Revolution

The Price of Magic Pills – Marginal Revolution

What it means to predict a crisis – Marginal Revolution

What economists believe – Greg Mankiw’s Blog

Recession Kids – Freakonomics

Men Underrepresented: 7 of 10 Grad School Fields – Carpe Diem

Drug Decriminalization in Portugal is Working – Carpe Diem

Markets In Everything: 99% Medical Savings – Carpe Diem

Mathematics and economics – Paul Krugman

Shichinin no Economusutai–NOT!! – Grasping Reality with Both Hands

The Empirical Evidence Against Big Government – Carpe Diem

New Deal and Great Depression – Cafe Hayek

contact me

Popularity: 8%

  • Share/Bookmark
Tagged with:
 

In Defense of Economists

MB: In a recent post of mine I had recommended a link to another blog posted by Paul Krugman of the New York Times titled How Did Economists Get It So WrongIt was an interesting article with a variety of valid points; one in particular is that “Few economists saw our current crisis coming.”

In looking for new content for this blog I came across another article suggesting that economists may not have gotten it so wrong.  First brought to my attention by the Division of Labour blog, the article(s) by David K. Levine a reputable and accomplished economist writes an open letter to Krugman in defense of Economists.  Please feel free to click the link below to read the article(s) by Levine, posted by the Huffington Post.

http://www.huffingtonpost.com/david-k-levine

contact me

Popularity: 6%

  • Share/Bookmark
Tagged with:
 

Further Proof of Free Market Success

By: Gabriel Madway

In what may just be a perfect storm of technology geek gadget lust, an auction house in Southern California is preparing to auction off the first Apple Macintosh Plus ever made–a computer that was owned by “Star Trek” creator Gene Roddenberry. The event promises to bring together two of the most famously devoted fan bases– Apple buyers and Trekkies.

Profiles in History, an auctioneer of Hollywood memorabilia, will offer the aging Mac at an auction scheduled for Oct. 8-9.  (For those keeping score at home, the device bears the serial number F4200NUM0001.)

The Macintosh Plus was launched in 1986 and featured a whopping 1 megabyte of RAM (today’s comparable desktop computers come loaded with a base 1 gigabyte of RAM — a 1,000 times more). It was the third model in the Mac line and cost $2,600, according to Wikipedia.  The very first Mac Plus to roll off an Apple assembly line was presented to Roddenberry as a gift. He died in 1991.

The auction house said It has an estimated sale price of $800-$1200.

http://blogs.reuters.com/mediafile/2009/09/17/attention-trekkies-roddenberrys-mac-on-auction-block/

MB: In a previous post of mine “Recession Sparks Innovation!” I listed a number of successful products that came out of the great depression, and how a recession or depression actually helps business creativity.  However creativity can come from intense competition as well not just a recession; competition between Microsoft, Apple, HP, Dell, and other technology companies have resulted in extreme advances in personal computers over the past several decades. As mentioned in the article above, one of the first personal computers had 1 megabyte of RAM, today’s computers come loaded with a base 1 gigabyte or RAM.  Competition also lowers product prices, PC computers in the early 1980’s cost roughly between $1600.00-$2800.00, in today’s market computers have a starting price of about $300.00 and are at least 1000 times more powerful and efficient. 

800px-macintosh_plus_img_1317

contact me

Popularity: 7%

  • Share/Bookmark
Tagged with:
 
Please visit WP-Admin > Options > Snap Shots and enter the Snap Shots key. How to find your key