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Sunday, 27 December

05:00

Saturday Quiz – December 26, 2015 – answers and discussion Bill Mitchell – billy blog

Here are the answers with discussion for yesterday’s quiz. The information provided should help you work out why you missed a question or three! If you haven’t already done the Quiz from yesterday then have a go at it before you read the answers. I hope this helps you develop an understanding of modern monetary theory (MMT) and its application to macroeconomic thinking. Comments as usual welcome, especially if I have made an error.

Question 1:

A hallmark of the neo-liberal period has been the declining share of wages in national income which in part meant that economic growth became more dependent on credit to maintain growth in consumption spending. Increasing the wage share will require that real wages grow in the coming years.

The answer is False.

A faster rate of real wages growth is not even a necessary condition much less a sufficient condition for a rising wage share.

Abstracting from the share of national income going to government, we can divide national income into the proportion going to workers (the “wage share”) and the proportion going to capital (the “profits share”). For the profit share to fall, the wage share has to rise (given the proportion going to government is relatively constant over time).

The wage share in nominal GDP is expressed as the total wage bill as a percentage of nominal GDP. Economists differentiate between nominal GDP ($GDP), which is total output produced at market prices and real GDP (GDP), which is the actual physical equivalent of the nominal GDP. We will come back to that distinction soon.

To compute the wage share we need to consider total labour costs in production and the flow of production ($GDP) each period.

Employment (L) is a stock and is measured in persons (averaged over some period like a month or a quarter or a year.

The wage bill...

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Saturday, 26 December

14:13

Christmas repost John Quiggin

Here’s a Christmas post from my blog in 2004. The theme is that nothing about Christmas ever changes, so it’s a repost of the same post from 2003. Looking back from 2015, the only change I can see is that the complaints about inclusive language to which I referred as “old stuff by now” have now become codified, as the “War on Christmas”.

I’ll add one new thought that the use of “War on Christmas” rhetoric reflects a larger problem for Christianists: should they be asserting their privileges as a majority (as in the demand that their particular holiday be recognised as primary) or demanding their rights as a minority (as in their unwillingness to accept equal marriage). The two strategies undermine each other.

In anticipation of at least a short break, let me wish a merry Christmas to all who celebrate it, and a happy New Year to everyone (at least everyone who uses the Gregorian calendar).

Read on for my unchanged Christmas message

CP Snow once said that most ancient British traditions dated back to the second half of the 19th century. The same idea recently popped up in the London Review of Books, with Stefan Collini referring to the

second half of the 19th century, the palaeolithic age of so many British cultural institutions

. Christmas provides an ideal illustration of this.

All the central features of Xmas date back, more or less exactly, to this period, including Christmas pudding, mince pies and cake, Christmas cards and Santa Claus. Although Dickens’ 1843 Chri...

Saturday, 19 December

05:00

Saturday Quiz – December 19, 2015 Bill Mitchell – billy blog

Welcome to the Billy Blog Saturday Quiz. The quiz tests whether you have been paying attention over the last seven days. See how you go with the following questions. Your results are only known to you and no records are retained.

Please go to Saturday Quiz – December 19, 2015 to view the quiz

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