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Crowding Out (economics)
In economics, crowding out is a phenomenon that occurs when increased government involvement in a sector of the market economy substantially affects the remainder of the market, either on the supply or demand side of the market. One type frequently discussed is when expansionary fiscal policy reduces investment spending by the private sector. The government spending is "crowding out" investment because it is demanding more loanable funds and thus causing increased interest rates and therefore reducing investment spending. This basic analysis has been broadened to multiple channels that might leave total output little changed or even smaller. Other economists use "crowding out" to refer to government providing a service or good that would otherwise be a business opportunity for private industry, and be subject only to the economic forces seen in voluntary exchange. Behavioral economists and other social scientists also use "crowding out" to describe a downside of solutions b ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Economics
Economics () is a behavioral science that studies the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goods and services. Economics focuses on the behaviour and interactions of Agent (economics), economic agents and how economy, economies work. Microeconomics analyses what is viewed as basic elements within economy, economies, including individual agents and market (economics), markets, their interactions, and the outcomes of interactions. Individual agents may include, for example, households, firms, buyers, and sellers. Macroeconomics analyses economies as systems where production, distribution, consumption, savings, and Expenditure, investment expenditure interact; and the factors of production affecting them, such as: Labour (human activity), labour, Capital (economics), capital, Land (economics), land, and Entrepreneurship, enterprise, inflation, economic growth, and public policies that impact gloss ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Treasury View
In macroeconomics, particularly in the history of economic thought, the Treasury view is the assertion that fiscal policy has ''no'' effect on the total amount of economic activity and unemployment, even during times of economic recession. This view was most famously advanced in the 1930s (during the Great Depression) by the staff of the British Chancellor of the Exchequer. The position can be characterized as: In his 1929 budget speech, Winston Churchill explained, "The orthodox Treasury view ... is that when the Government borrow in the money market it becomes a new competitor with industry and engrosses to itself resources which would otherwise have been employed by private enterprise, and in the process raises the rent of money to all who have need of it." Keynesian economists reject this view, and often use the term "Treasury view" when criticizing this and related arguments. The term is sometimes conflated with the related position that fiscal stimulus has ''negligible'' im ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Paul Krugman
Paul Robin Krugman ( ; born February 28, 1953) is an American New Keynesian economics, New Keynesian economist who is the Distinguished Professor of Economics at the CUNY Graduate Center, Graduate Center of the City University of New York. He was a columnist for ''The New York Times'' from 2000 to 2024. In 2008, Krugman was the sole winner of the Nobel Memorial Prize in Economic Sciences for his contributions to New Trade Theory, new trade theory and New Economic Geography, new economic geography. The Prize Committee cited Krugman's work explaining the patterns of international trade and the geographic distribution of economic activity, by examining the effects of Economy of scale, economies of scale and of consumer preferences for diverse goods and services. Krugman was previously a professor of economics at MIT, and, later, at Princeton University which he retired from in June 2015, holding the title of Emeritus, professor emeritus there ever since. He also holds the title o ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Federal Funds
In the United States, federal funds are overnight borrowings between banks and other entities to maintain their bank reserves at the Federal Reserve. Banks keep reserves at Federal Reserve Banks to meet their reserve requirements and to clear financial transactions. Transactions in the federal funds market enable depository institutions with reserve balances in excess of reserve requirements to lend reserves to institutions with reserve deficiencies. These loans are usually made for one day only, that is, "overnight". The interest rate at which these transactions occur is called the federal funds rate. Federal funds are not collateralized; like eurodollars, they are an unsecured interbank loan. Federal funds transactions by regulated financial institutions neither increase nor decrease total reserves in the banking system as a whole, instead, they redistribute reserves. Before 2008, this meant that otherwise idle funds could yield a return. (Since 2008, the Fed has pa ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Jared Bernstein
Jared Bernstein (born December 26, 1955) is an American government official who was the chair of the United States Council of Economic Advisers. He is a senior fellow at the Center on Budget and Policy Priorities. From 2009 to 2011, Bernstein was the chief economist and economic adviser to Vice President Joe Biden in the Obama administration. In 2008, Michael D. Shear described Bernstein as a progressive and "a strong advocate for workers". In February 2023, President Joe Biden nominated Bernstein to serve as Chair of the Council of Economic Advisers. He was confirmed to be chair on June 13, 2023. He was ceremonially sworn in by Vice President Kamala Harris on July 10, 2023. Early life and education Bernstein grew up in a musical family wanting to be a musician, starting a band with friends. Bernstein graduated with a bachelor's degree in music from the Manhattan School of Music where his first double bass teacher was Orin O'Brien. Throughout the '80s, Bernstein was a mainst ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Potential Output
In economics, potential output (also referred to as "natural gross domestic product") refers to the highest level of real gross domestic product (potential output) that can be sustained over the long term. Actual output happens in real life while potential output shows the level that could be achieved. Limits to output Natural (physical, etc) and institutional constraints impose limits to growth. If actual GDP rises and stays above potential output, then, in a free market economy (i.e. in the absence of wage and price controls), inflation tends to increase as demand for factors of production exceeds supply. This is because of the finite supply of workers and their time, of capital equipment, and of natural resources, along with the limits of our technology and our management skills. Graphically, the expansion of output beyond the natural limit can be seen as a shift of production volume above the optimum quantity on the average cost curve. Likewise, if GDP persists below natural ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Private Sector
The private sector is the part of the economy which is owned by private groups, usually as a means of establishment for profit or non profit, rather than being owned by the government. Employment The private sector employs most of the workforce in some countries. In private sector, activities are guided by the motive to earn money, i.e. operate by capitalist standards. A 2013 study by the International Finance Corporation (part of the World Bank Group) identified that 90 percent of jobs in developing countries are in the private sector. Diversification In free enterprise countries, such as the United States, the private sector is wider, and the state places fewer constraints on firms. In countries with more government authority, such as China, the public sector makes up most of the economy. Regulation States legally regulate the private sector. Businesses operating within a country must comply with the laws in that country. In some cases, usually involving multinati ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Ceteris Paribus
' (also spelled ') (Classical ) is a Latin phrase, meaning "other things equal"; some other English translations of the phrase are "all other things being equal", "other things held constant", "all else unchanged", and "all else being equal". A statement about a causal, empirical, moral, or logical relation between two states of affairs is ''ceteris paribus'' if it is acknowledged that the statement, although usually accurate in expected conditions, can fail because of, or the relation can be abolished by, intervening factors. chapter 2 A ''ceteris paribus'' assumption is often key to scientific inquiry, because scientists seek to eliminate factors that perturb a relation of interest. Thus epidemiologists, for example, may seek to control independent variables as factors that may influence dependent variables—the outcomes of interest. Likewise, in scientific modeling, simplifying assumptions permit illustration of concepts considered relevant to the inquiry. An example ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Monetary Policy
Monetary policy is the policy adopted by the monetary authority of a nation to affect monetary and other financial conditions to accomplish broader objectives like high employment and price stability (normally interpreted as a low and stable rate of inflation). Further purposes of a monetary policy may be to contribute to economic stability or to maintain predictable exchange rates with other currencies. Today most central banks in developed countries conduct their monetary policy within an inflation targeting framework, whereas the monetary policies of most developing countries' central banks target some kind of a fixed exchange rate system. A third monetary policy strategy, targeting the money supply, was widely followed during the 1980s, but has diminished in popularity since then, though it is still the official strategy in a number of emerging economies. The tools of monetary policy vary from central bank to central bank, depending on the country's stage of development, inst ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Demand For Money
In monetary economics, the demand for money is the desired holding of financial assets in the form of money: that is, cash or bank deposits rather than investments. It can refer to the demand for money narrowly defined as M1 (directly spendable holdings), or for money in the broader sense of M2 or M3. Money in the sense of M1 is dominated as a store of value (even a temporary one) by interest-bearing assets. However, M1 is necessary to carry out transactions; in other words, it provides liquidity. This creates a trade-off between the liquidity advantage of holding money for near-future expenditure and the interest advantage of temporarily holding other assets. The demand for M1 is a result of this trade-off regarding the form in which a person's funds to be spent should be held. In macroeconomics motivations for holding one's wealth in the form of M1 can roughly be divided into the transaction motive and the precautionary motive. The demand for those parts of the broader mon ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Liquidity Trap
A liquidity trap is a situation, described in Keynesian economics, in which, "after the rate of interest has fallen to a certain level, liquidity preference may become virtually absolute in the sense that almost everyone prefers holding cash rather than holding a debt (financial instrument) which yields so low a rate of interest."John Maynard Keynes, Keynes, John Maynard (1936) ''The General Theory of Employment, Interest and Money'', United Kingdom: Palgrave Macmillan, 2007 edition, A liquidity trap is caused when people hold cash because they Expectation (epistemic), expect an adverse event such as deflation, insufficient aggregate demand, or war. Among the characteristics of a liquidity trap are interest rates that are close to zero lower bound and changes in the money supply that fail to translate into changes in inflation.Paul R. Krugman, Krugman, Paul R. (1998)"It's baack: Japan's Slump and the Return of the Liquidity Trap," Brookings Institution, Brookings Papers on Economi ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Laura D'Andrea Tyson
Laura D'Andrea Tyson (born June 28, 1947) is an American economist and university administrator who is currently a Distinguished Professor of the Graduate School at the Haas School of Business of the University of California, Berkeley and a senior fellow at the Berggruen Institute. She served as the 16th Chair of the White House Council of Economic Advisers from 1993 to 1995 and 2nd Director of the National Economic Council from 1995 to 1996 under President Bill Clinton. Tyson was the first woman to hold each of those posts. She remains the only person to have served in both posts. Early life and education Tyson was born Laura D'Andrea in New Jersey. Her father was Italian American and her mother was of Swedish and Dutch descent. Tyson graduated ''summa cum laude'' with a B.A. in Economics from Smith College in 1969 and earned her Ph.D. in Economics from the Massachusetts Institute of Technology in 1974. Her doctoral advisor was Evsey Domar. She joined the faculty of the econom ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
