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Summarized Content

ut index = l - t. (ut index goes to zero at limit of business cycle.). new economic thinking.. effective demand limit upon the utilization of labor and capital. one factor in the economy that i track is the percentage of capital income that is used for consumption. the number is attained by using the last 2 quarters show that capital income is spending less on consumption. the percentage is falling. this normally sets up a trend what does it mean when capital income starts consuming less? basically capital income is choosing to save its money thinking that an economic contraction is coming. the idea is to protect as*ets by consuming less and saving more. capital income is saving more in the last two quarters. (the vertical red lines show the starts of recessions) these trends in capital income in the last two quarters would normally signify a path toward recession. looks like some correlation between inflation & %yoy number of employed. more workers, more new demand. (link to data economy is currently at limit of unemployment where either labor share rises, capacity utilization drops or unemployment starts rising. (link the famous economist john maynard keynes tried to put forth a theory of effective demand. keynes even devoted chapter 3 of his general theory book to it. however, nowadays you will not see the term effective demand in economic textbooks. what happened to it? why is keynes laid down some basic ideas about effective demand but did not give specific equations. it is clear that keynes distinguished effective demand from aggregate demand. still modern economists equate effective demand with aggregate demand. this is a mistake. now we only consequently, there is a missing piece of economic theory that is still yet to be found. how then can we understand effective demand? developing a model of effective demand was my doctoral work. this is the cornerstone equation of the model. the equation basically says that the percentage of national income going to labor (labor share) sets a limit upon the multiple of the


Effectivedemand Main Page Content

HTML Tag Content Informative?
Title: Effective Demand Could be improved
Description: This blog discusses the equation for Effective Demand in macroeconomics and how the equation determines the constraints on unemployment, capacity utilization and real
H1: Effective Demand ResearchIs it informative enough?
H2: Basic Effective Demand Limit, L = labor share index * 0.76 Effective demand on real GDP = rGDP*e*T/L (1 -(1 - 1/e)T/L) Effective Demand Monetary rule
H3: Capital Income Consumption is Finally FallingIs it informative enough?

Other Helpful Websites and Services for Effectivedemand

Internal Pages

/ed/:
Title

Effective Demand Research

Description

This blog discusses the equation for Effective Demand in macroeconomics and how the equation determines the constraints on unemployment, capacity utilization and real GDP.

H1

Effective Demand Research

H2

Basic Effective Demand Limit, L = labor share index * 0.76 Effective demand on real GDP = rGDP*e*T/L (1 -(1 - 1/e)T/L) Effective Demand Monetary rule with NGDP targeting = z(T2 + L2) - (1 - z)*(T + L) + (1+a)*current core inflation + a*core inflation average - 2a*core inflation target z = (2L + Natural real rate)/(2L2 + 2L) ............................ T = capacity utilization*(1 - unemployment rate)UT index = L - T ... (UT index goes to zero at limit of business cycle.) New economic thinking... effective demand limit upon the utilization of labor and capital

H3

Capital Income Consumption is Finally Falling

/ed/2018/06/capital-income-consumption-is-finally-falling.html:
Title

Capital Income Consumption is Finally Falling - Effective Demand Research

Description

One factor in the economy that I track is the percentage of Capital Income that is used for Consumption. The number is attained by using the NIPA tables and labor share. Here is the updated data up to 1st quarter 2018. The last 2 quarters show that capital income is...

H1

Effective Demand Research

H2

Basic Effective Demand Limit, L = labor share index * 0.76 Effective demand on real GDP = rGDP*e*T/L (1 -(1 - 1/e)T/L) Effective Demand Monetary rule with NGDP targeting = z(T2 + L2) - (1 - z)*(T + L) + (1+a)*current core inflation + a*core inflation average - 2a*core inflation target z = (2L + Natural real rate)/(2L2 + 2L) ............................ T = capacity utilization*(1 - unemployment rate)UT index = L - T ... (UT index goes to zero at limit of business cycle.) New economic thinking... effective demand limit upon the utilization of labor and capital

H3

Capital Income Consumption is Finally Falling

/ed/business-cycle/:
Title

Effective Demand Research: business cycle

Description

This blog discusses the equation for Effective Demand in macroeconomics and how the equation determines the constraints on unemployment, capacity utilization and real GDP.

H1

Effective Demand Research

H2

Basic Effective Demand Limit, L = labor share index * 0.76 Effective demand on real GDP = rGDP*e*T/L (1 -(1 - 1/e)T/L) Effective Demand Monetary rule with NGDP targeting = z(T2 + L2) - (1 - z)*(T + L) + (1+a)*current core inflation + a*core inflation average - 2a*core inflation target z = (2L + Natural real rate)/(2L2 + 2L) ............................ T = capacity utilization*(1 - unemployment rate)UT index = L - T ... (UT index goes to zero at limit of business cycle.) New economic thinking... effective demand limit upon the utilization of labor and capital

H3

Capital Income Consumption is Finally Falling

/ed/2017/11/inflation-changes-in-the-of-employed.html:
Title

Inflation & changes in the # of employed - Effective Demand Research

Description

Looks like some correlation between inflation & %yoy number of employed. More workers, more new demand. (link to data)

H1

Effective Demand Research

H2

Basic Effective Demand Limit, L = labor share index * 0.76 Effective demand on real GDP = rGDP*e*T/L (1 -(1 - 1/e)T/L) Effective Demand Monetary rule with NGDP targeting = z(T2 + L2) - (1 - z)*(T + L) + (1+a)*current core inflation + a*core inflation average - 2a*core inflation target z = (2L + Natural real rate)/(2L2 + 2L) ............................ T = capacity utilization*(1 - unemployment rate)UT index = L - T ... (UT index goes to zero at limit of business cycle.) New economic thinking... effective demand limit upon the utilization of labor and capital

H3

Inflation & changes in the # of employed

/ed/inflation/:
Title

Effective Demand Research: inflation

Description

This blog discusses the equation for Effective Demand in macroeconomics and how the equation determines the constraints on unemployment, capacity utilization and real GDP.

H1

Effective Demand Research

H2

Basic Effective Demand Limit, L = labor share index * 0.76 Effective demand on real GDP = rGDP*e*T/L (1 -(1 - 1/e)T/L) Effective Demand Monetary rule with NGDP targeting = z(T2 + L2) - (1 - z)*(T + L) + (1+a)*current core inflation + a*core inflation average - 2a*core inflation target z = (2L + Natural real rate)/(2L2 + 2L) ............................ T = capacity utilization*(1 - unemployment rate)UT index = L - T ... (UT index goes to zero at limit of business cycle.) New economic thinking... effective demand limit upon the utilization of labor and capital

H3

Inflation & changes in the # of employed

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