An inflationary spiral based on expectations. It is a very different one from a deflationary one.
In the case of supply chain disruption (think floods and drought) it's a supply shock and at best businesses have to scramble to adapt (invest etc) to get around the problem. But hammering COL demand is perverse.
In all cases, messing around with interest rates is largely an exercise in futility.
Elsewhere the arrival of the Taylor Swift tour has prompted discussion (expectations) of how the tour ticket sales & other expenditure will prompt a focussed economic boomlet....
In the UK, predictions are focussed on the likely expansion of ticketing fraud.
As Rachel Reeves stresses the link between international relations & economics... for those of us who've been (in my case) or still are International Political Economists, this is all very much what we've been talking about for decades.
So, for those of you wondering how that might work, one great book that brings a lot of the things Reeves is talking about together is:
If you think consumer sentiment (confidence) is a good indicator of the general state of the economy, you'll (perhaps) be unsurprised that across the EU and in UK & USA, such sentiment has yet to return to pre-pandemic levels.
Given the continuing cost of living crises, high(er) interest rates & a range of issues from conflicts to climate change, its perhaps more surprising sentiment has not declined more.
But, if capitalism is a system built on confidence about the future....
Ah, #capitalism. Neoclasical (mainstream) economic theory tells us it ensures resources will be put to the best, most efficient use. However, ignores the obvious: wealth equals power, so that what is "best" for society is what the richest value.
Like chasing everlasting youth by getting weekly blood transfusions from your teenage son and $40,000 gym membership add-ons.
A thing I think he doesn't give enough attention to is the role the Fed DOES play. The Fed indirectly controls bank lending rate through a couple mechanisms. The first is whatever rules it has for declaring a bank solvent. They've eliminated reserve requirements but now it's something like a stress test or whatever. A bank can't keep lending
"Modern #economics does not distinguish between renewable and non-renewable materials, as its very method is to equalise and quantify everything by means of a money price. Thus, taking various alternative fuels, like coal, oil, wood, or waterpower: the only difference between them recognised by modern economics is relative cost per equivalent unit. The cheapest is automatically the one to be preferred, as to do otherwise would be irrational and ‘uneconomic’."
The model of 'flexible' labour markets with few(er) protections for workers & curtailed unions was (mainstream economists predicted) going to delver innovation, spur entrepreneurship & lead to better-paid jobs... but we actually have got from it is an economy patterned by low-wage labour, inequality, falling real wages & labour exploitation (via precarious working).
As Larry Elliot suggests, its time to follow unions urging to try a different way!
Self-interest + shortermism + monopoly power = whatever this shit is:
"Frontier knew that it could make a billion dollars in profit over a decade by investing in fiber build-out, but it chose not to, because stock analysts will downrank any carrier that made capital investments that took more than five years to mature. Because Frontier's execs were paid primarily in stock, they chose... to leave a billion dollars sitting on the table..."
So I'm probably going to be nerd sniped into developing a Jupyter notebook to examine the question of how well are mid income families 2 adults and 2 kids doing relative to how well their parents were doing 30 years earlier. I'm going to use a dirichlet prior over the weights on a 5 item CPI based expense index. The missing part is paired nominal earnings of people and their parents... Anyone know a dataset #statistics#data#economics@economics@a.gup.pe
"In American mythology, people are rich because of 'hard work.' Yet nobody can explain why those who do all the actual labor have no money." - Steven Salaita
"The literature on degrowth routinely argues (appropriately so) that the global north rather than the global south must be the target for change, but it may well be that the vanguard for degrowth resides, paradoxically, in the global south. It may be that subconscious bias causes us to believe that the global south must catch up with the economic production of the wealthiest states, rather than encouraging us to imagine that the wealthy states need to catch up to the level of consciousness displayed by the most radical societies in the global south."
(Some) ignorant leftbros: "Class first! No idpol!"
Scholars of right wing politics/economics: "All these right-wing thinkers are much more comfortable thinking about the blurred lines between sexual and economic politics than many thinkers on the left. And they understand that Keynesianism rests on a certain kind of sexual contract. Any challenge to this order—whether it be an escalation of wage or benefit claims, or the flight from sexual normativity, or unmarried women claiming welfare benefits—disrupts the fiscal and monetary calculus on which Keynesianism rests."
Above remark from "The Extravagances of Neoliberalism", an interview of Melinda Cooper (author of "Counterrevolution: Extravagance and Austerity in Public Finance") by Benjamin Kunkel, in The Baffler.
Markets - Where did all the stocks go?
Public Companies In Decline
The number of public companies has fallen fast by Matt Phillips, David Crowther 4/28/24
"...After analyzing the effects of mergers, private-equity investment, and regulatory costs, the paper suggests that M&A is the main culprit. (Though they do theorize that higher costs associated with regulation could be a less important contributing factor.)
“Mergers seem to be the biggest driver of this trend,” Ali Sanati told Sherwood. Sanati is a finance professor at the American University in Washington, DC, and a coauthor of the 2023 paper.
The authors categorized mergers according to various financial metrics, noting that mergers motivated around financing and innovation “are the ones that effectively reduce the number of U.S. listings.”
Finance and Economic Breakdown: Modeling Minsky's "Financial Instability Hypothesis"
Minus the math, which can be skipped over, for his discussion, the paper lays out the basics of modern economics wrt to economic cycles and labor v capitalist v creditor (banks) income.
It’s the basic model to reason about our economy and its state.