AlexMerced - All Comments

re: Labor Economics #1 - Sticky Wages

Nadjeschda — Mon, 01 Nov 2010 16:49:53 GMT

Even if wages where sticky unemployment can't be permanent. In an economic recession the environment usually starts regenerating. For example: If fishers cling to high wages these might surpass their labor productivity leading to unemployed. Given that the sea is overfished now, the fish stock has time to regenerate if fishers are layed of. Over time you will be able to catch more fish with less hours of work, the productivity of labor per hours hence rises until it becomes attractive to hire again. Since there is no steady state in environment there can't be a steady state of unemployment.

re: Labor Economics #2 - Labor Mobility

Alan Gingles — Mon, 16 Aug 2010 08:08:32 GMT

I would like to add also that , increasingly , people are buying cars on credit from banks etc. They are not allowed to sell these cars until they have paid the balance , furthermore , there are mechanisms in place in the uk anyway that prevent one from removing ones car from the country. I believe this is to stop international criminals coming here to buy cars on credit and then whisking them off to Romainia or somewhere like that where it is difficult to locate them.

re: Labor Economics #3 - The Minimum Wage

Alan Gingles — Sun, 15 Aug 2010 17:52:55 GMT

I can see how this is true in some cases , where the employer has a low profit margin , but surely where the profit margin is high the employer would soak up the cost of the increase in minimum wage?

I believe some sort of minimum standard of living , perhaps , rather than a minimum wage should be enforced by the government in the Uk because some minimum wage earners abuse alcohol or drugs , have gambling habits or what not. These people have less to spend on food , housing , their children etc. If it were up to me we would employ and train volunteers ( probably unemployed ) to a minimum level so they could carry out building projects and this way they would be trained and could move to places like australia where they are needed and we would have our green housing. I would have families on unemployment benifits growing food in their gardens , this would feed them, educate them , give them a sense of pride and keep them out of trouble.

re: Labor Economics #1 - Sticky Wages

Alex Merced — Sat, 14 Aug 2010 12:42:15 GMT

I agree with you Jonathan, what I'm trying to do in this paper is say IF the stick wage issue was a real issue I don't see why further inflation and government intervention would be prescribed. If wages are sticky then workers would benefit more from deflation from their real wage increase.

Although Having formerly owned a business and currently being in the room when decisions are made where i'm working now I can understand how labor costs usally move up and down last.

If things are good, my other costs rise as well so I won't give out as much of a raise as I would otherwise.

If things are bad, I'm going to cut everything else I can before I give a paycut whether out of not wanting to lose talent or out of pure empathy.

Prices have fallen faster than wages for example in the recession of 1920, and it didn't cause the spiral that Keyenes warns about which is the point I'm making, if wages are stick... it's not really a problem.

Although if there is a price floor it does limit the ability of an entrepeneur to adjust his prices during very large recessions which will cause further unemployment beyond the unemployment it causes all the time anyways.

re: Labor Economics #1 - Sticky Wages

david2viya — Sat, 14 Aug 2010 00:20:53 GMT

In this post the writer has taken his notice to the labor economy.I myself appreciate his writing.

re: Labor Economics #1 - Sticky Wages

Jonathan M. F. Catalán — Fri, 13 Aug 2010 21:47:13 GMT

Deflation between 1879 and 1893 was of a different kind than the one Keynes was referring to (although, I'm not sure Keynes recognized the differences fully). The former was a product of an increase in productivity (the money supply still increased during that period, it just did not match the increase in productivity). The deflation we are experiencing today is a product of a contracting money supply.

Nevertheless, the only reason there should be sticky wages is due to price floors on wages, or government-induced inflation of the costs of breaking labor contracts (the most likely reason, today).

re: Capitalism, Socialism, and Voluntarism

pentahedron — Tue, 10 Aug 2010 02:21:56 GMT

Good stuff. Keep it up.

re: Understanding Social Policy

ricarpe — Sun, 11 Jul 2010 14:59:58 GMT

I like the definitions, Alex. How would you explain the interactions between the various institutions and the influences they exert upon one another? (i.e.: a religious institutions influence upon the family; a government institutions influence upon a social club)

re: Is Deflation Better?

Alex Merced — Fri, 16 Apr 2010 23:00:21 GMT

I agree, when I'm referring to deflation I'm mainly to referring to artificial reductions of fiat mneys supply, I am totally ok with adopting a commodity money no matter the supply of it.

re: Is Deflation Better?

Manestor — Thu, 08 Apr 2010 08:29:42 GMT

Deflation is necessary. We should not prevent it, we should not be afraid of it's consequences, we should welcome it.

Deflation as an artificial regulation, of couse, just works out like any other regulation, i.e very badly. But we live in an artificial fiat currency / inflationary world. In order to go back to a commodity based currency standard (it doesn't have to be gold), readjustment of the money supply is necessary. That would mean deflation, yes, and that is good. That is the desired alternative we should put foward.

When we reach a natural equilibrium with a commodity based currency, you can talk about about a no-inflation-nor-deflation policy but until then, when someone asks you if stopping inflation means deflation you should say yes. People are not concerned about what should be done in an ideal world, they want to know what you plan to do now.

You might already be aware of this. This may be a simple confusion in terms but I think it is worth pointing it out. You talk about deflation as a "manipulation of the money supply ". A more objective definition of deflation is decrease of money supply. Not necessarely a manipulation, which implies tons of regulations. You seem to be considering arificial deflation only. Any sensible economist should be against artificial regulations. But you can't consider putting an end to a regulated system like any other regulation.

re: Is Deflation Better?

Manestor — Thu, 08 Apr 2010 07:57:24 GMT

In an ideal world, I agree, there would be no inflation and no deflation either. But for now, in this inflationary / fiat currency world, deflation is absolutely necessary until we stabilze the money market. Going back to a commodity based currency is not an artificial regulation, it is precisely the opposite. That would mean a decrease in the quantity of money but this kind of deflation is necessary and should be welcomed.