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25 Cards in this Set
- Front
- Back
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5 key trends in a labor market
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1 (20th century) all industrial countries experienced significant growth in real wages
2 (1970s) rate of real wage growth has slowed (50/60s wage gains) 3 (United states) in US employment has grown significantly over the last 100+yrs(except the last 5-6years) 4 (1970s) real wage growth has become more unnatural, distribution of income, gape between skilled/unskilled workers, substantial edu., tech., globalisation skills 5 (western european nations) high ave unemployment rate, has changed in yrs |
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Real GDP in the 4th quarter (3/27)
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grew 2.6%
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Where does growth come from in rGDP
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(table #1)
focus on labor productivity to increase rGDP per capita Doesn't really change for US |
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What are the determinants of Y/L
(rGDP/labor force participation rate) |
1. Physical capital (K) [equip., machines, structures]
2. Human capital (H) [training, edu., overall skills] 3. Technology 4. Natural resources [makes a very small difference] 5. Institution Features of encon. |
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Policies that encourage long term growth in rGDP
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1. Edu. Policies
2. Encouraging saving & investment (eliminate tax of interest, replace with consumption tax) 3. Individual Retirement Accounts(IRAs) favored retirement acct 4. Reduce capital gains transaction 5. encourage investment in capital goods through investment in top credit 6. encourage investment by accelerated depriciation write-offs(write off assets faster) 7. R&D tax credits (research and development) 8. industrial policy (be careful) |
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national savings
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=private savings(household) + public savings (governments)
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Disposable income (DI)
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(Look as notes for situations)
balanced budget when T=G gov. budget deficit---> t<g |
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Federal Budget deficit
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T<G
increase in privet savings(S) will increase fed. bud. def. (T-G) < 0 (T-G)decreases (-Nx) increases |
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Bureau of Labor Statistics
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Unemployment unchanged (6.7%)
Increase in labor force reduction in long-term unemployment increase in part-time employment employment increase by 192,000 |
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Twin deficit
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2 budget deficits (gov. and trade)
directly related in economic problems |
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Policies to encourage long term growth in Federal Budget deficit
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stimulation technological progress
National Science Foundation(NSF) research, National Institution of health(NIH) research, R&D policy, Pantent policies -long run increase =>increase in labor force = more output -but lowers output per capita |
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aggregate production function
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Y=AF(K,L,H)
(K,L,H)=Production inputs how much of economic growth to attribute to changes in the accumulation of capital and how much to attribute to advancing technology |
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Finantial intermediaries
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Banks and mutual funds(investment program funded by shareholders)
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Mutual Funds
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pools investors shares and makes perchases of financial instruments in large quantities
-Low yielding (risk), less accumulation Financial intruments: stocks, bonds, money market mutual funds(MMMF) |
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Top 3 stock markets
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Dow Jones Industrial Average(DJIA)
Standard and Poors 500(S&P 500) NASDAQ (over the counter stocks) |
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investing in a sock index fund
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you don't ask a fund manager to pick the winner, you find the broad market avg and recive returns associated w/ these Business Marketing Associations (B.M.A.)
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stock
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share of ownership in a public trade company
-equity interest in company |
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Stockholders
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last in line when company has to payout claims (when it goes under)
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Dividends
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returns on a stock
-capital gains and losses -price of stock apreciates/depriciates |
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Price earnings ratio
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stock price/anual earnings
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bonds
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in the bond market is where interest rates are determinded
bonds issuers are creating debt instruments -make fixed payments to bond investors -bond investors are creditors (recall stock investors are owners) |
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Who issues bonds?
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US Treasury Bills:
(short term, less than 1yr to mature) (intermediate term instruments mature 1 and 10yrs) (longterm debt matures 10+yrs and up to 30) Municipal bonds: state/local gov. bonds pay interest that is empty from federal income taxation(state income taxation) state/local can default bonds Corporate bonds: companies sell bonds to financial capital formation projects |
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Institution Features of encon.
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-organize of econ system
focus on instentives encourage entrepenuer./inovation property rights good legal systems/political systems(rights protected/no corruption) econ freedom good finatial system good infrastructures |
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Rule of 72
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72/annual economic growth rate
72/interest rate |
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these countries suffer from high unemployment rates
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portugal, Ireland, Italy, Greece, Spain
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