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70 Cards in this Set
- Front
- Back
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Saving
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Household income - consumption based on current need
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Saving rate
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Amount that you save of your total income
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Wealth
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Assets minus liabilities
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Assets
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Things you own
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Liabilities
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Things you owe
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Life cycle saving
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Saving to meet long-term goals (college or retirement)
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Precautionary saving
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Saving for "just in case" situations
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Bequest saving
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Saving to pass on after death
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Real interest rate
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Nominal interest rate - inflation
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Why us households save so little
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Easy credit and diffuculty resisting urges to spend.
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The higher the interest rate the...
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more saving you see.
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The lower the interest rate...
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the more spending you see.
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Demonstration effect
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People see what their neighbors have and want one too.
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Household saving rate in the US
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Around 0
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Why is unemployment high in europe?
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Unemployment benefits and high minimum wages
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Which industries face the toughest competition
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Low skill worker industries
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Why has the gap between high skilled and low skilled jobs increased so much?
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Technology and globalization.
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Unemployment rate =
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unemployed people / labor force
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Frictional unemployment
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Short term unemployment where the person is just looking for their next job.
Short-term |
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Short term unemployment
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Frictional unemployment
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Structural unemployment
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long term and chronic unemployment that exists even with economy functioning normally
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long term unemployment
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Structural
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Cyclical unemployment
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Extra unemployment that occurs during recession, especially depression.
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Cost/benefit: Minimum wage laws
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Fewer people can be employed, People employed get more
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Cost/benefit: Labor Unions
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Fewer people can be employed, Workers have rights and representation
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Cost/benefit: Unemployment Insurance
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Source of structural unemployment but it improves the fit of the job when people do finally find on.
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Saboteur
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Someone who destroys machines with their clogs
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Cost/benefit: Health and safety regulations
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More expensive, so fewer employees. Safer workplace
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Since 1970's employment has...
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Increased rapidly
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Since 1970's increase in Real Wages has...
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Slowed, but not decreased.
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Diminishing returns to labor
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If the same capital is there, the less each additional employee will add.
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Supply curve of labor
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Like with baby boomers
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Physical capital
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The tools and machinery that employees work with.
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Diminishing returns on capital
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The more you have the less it will help. Firms have to use capital to the fullest extent.
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New technology........ growth
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stimulates, and specializing will occur soonafter
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Entrepreneurship
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Taxes limit entrepreneurship
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What is the role of government with entrepreneurship
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Set costs for starting business, define property rights clearly, and provide market confidence and political stability
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IRA
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Individual retirement account
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In order for foreign aid to be effective in a poor country...
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there must be political stability
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hyperinflation
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Very high interest rates
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Nominal interest rate
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Increase in nominal value of an asset
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Real interest rate =
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Nominal interest rate - inflation rate
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Real interest rate is...
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The value of an asset after interest bu also after inflation
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Fisher effect
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The tendency for nominal interest rate to be high when inflation is high, low when inflation is low.
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Human capital
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Talents, education, training, and skill or workers.
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Article: US Saving is about...
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How we don't save very much. Mostly relative analysis
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Article: Bank Crisis Pattern
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Crashes tend to be preceded by the same things.
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Article: Displacement activity
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How Miami coped so well with influx of immigrants and Yugoslavia did not. It was because technology was behind in Miami and this large pool of labor meant they could stay back behind the times without problem. Restrictions on growth in Yugoslavia
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Article: Myths and Migration
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Arguing that immigration has had little negative effect.
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Article: US vs Euro Living Standards
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Europe isn't really as far behind us because of leisure time and variety
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Article: American Productivity Growth
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Productivity increases are good for US economy, long term
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Article: Collapse of Personal Saving
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Social Security is NOT responsible for decline in personal saving rate.
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Article: Collapse of Personal Saving author
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Frank Caliendo
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Article: A Century of Work and Leisure
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Leisure time is the same as in 1900
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Article: Inflation and Recession
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Not really anything.
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Increased prices of output.... .... labor demand
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Increases
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Increased productivity ..... .... labor demand
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Increases
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Labor supply curve goes ....
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up, because the higher the pay the more people are willing to do the work.
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Importing.... labor demand
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Decreases
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Exporting.... labor demand
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Increases
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US unemployment rate
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5.5%
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Capital gains
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Increases in the value of existing assets
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Capital losses
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Decreases in the value of existing assets
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Three components of National saving
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Government, Business, Household
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Technology..... national saving and investment
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Increases, and it increases real interest rate
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US unemployment rate
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5.5%
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Capital gains
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Increases in the value of existing assets
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Capital losses
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Decreases in the value of existing assets
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Three components of National saving
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Government, Business, Household
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Technology..... national saving and investment
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Increases, and it increases real interest rate
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