automatic stabilizers Archive

Bank earnings as a demand leakage

All unspent income is called a ‘demand leakage’ as it means the output can’t get sold unless another agent spends more than his income. (by identity, not ‘theory’) And unsold output leads to cuts in output, cuts in employment, etc. etc. and down you go until some agent spends enough more than ...Read More

European Retail Sales Decline Most in Nine Months

‘market forces’ are driving national deficits higher via automatic stabilizers which drives the euro lower to the point exports rise sufficiently to turn the tide, but that needs to happen before the rising deficits result in defaults. On Thu, Apr 8, 2010 at 6:04 AM, La-Toya Elizee wrote: European Retail Sales Decline ...Read More

Federal Deficit as a % of GDP

[Skip to the end] Looking very much like the automatic stabilizers turned the tide around year end, and subsequent fiscal adjustments are helping firm things up as well. But there was a lot of work to do to add back the financial assets to the government lost during the surplus years of ...Read More

EU Daily | ECB sees ‘turning point’ in lending conditions

[Skip to the end] Yes, central banks have finally managed to restore a degree of ‘market functioning’ after full year or more of ‘extraordinary measures’ which mainly served to demonstrate a lack of understanding of basic monetary operations. Note that only after automatic stabilizers began to reverse the slide at year end ...Read More

Repost: Comments on Krugman

[Skip to the end] Originally posted March 9th, 2009 Yes, but unspoken is the automatic stabilizers are quietly adding to the deficit with each move down, and the curves will cross and the economy start to improve when the deficit gets large enough, whether it’s the ugly way via falling revenues and ...Read More