Economic trends and their policy implications

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I wanted to clarify a few things that came up in the "Evidence Mounts That The Vote May Have Been Hacked" thread. I also wanted to provide a new thread for this topic to un-hijack BumbleBeeBoogie's thread.

timberlandko wrote:

Since 1962, the average Budget Deficit as percentage of GDP has been 2.19%, marked by the extremes of 1983's 6.0% Deficit and 2000's Surplus of 2.4%. In 37 of those 42 years, there has been a budget deficit, in 5 there has been a surplus. Taken alone, the average deficit for the period has been 2.66%. For the 20 year period 1984 - 2004, the average budget deficit has been 2.32%, deficits having been recorded for 16 of those 20 years, ranging from 1985's 5.1% shortfall to the relatively small 0.3% deficit of 1997. Considering only the deficits themselves, the average of the 16 deficits recorded over the past 20 years has been 3.31%.
Data: Congressional Budget Office: The Budget and Economic Outlook: Fiscal Years 2005 to 2014 (Download note: 3.2 MB pdf file), Appendix F; Historical Data

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Steppenwolf - you're presumably familiar with Markov switching processes in times of international upheavals.

Include the deflationary effects of the fall in our exchange rate in your model and you'll see that no argument can be made for tax increases. As to % of deficit/GDP the really large numbers - far exceeding ours now - were observed during the FDR administrations.

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HofT wrote:

Steppenwolf - you're presumably familiar with Markov switching processes in times of international upheavals.

Include the deflationary effects of the fall in our exchange rate in your model and you'll see that no argument can be made for tax increases. As to % of deficit/GDP the really large numbers - far exceeding ours now - were observed during the FDR administrations.

You have a lot of dots to connect here before I can accept this. You can't name an econometric model (like Markov switching) and expect me to agree with your conclusions unless you give me an actual argument. Where are you going here? Details

You should start by explaining how "deflationary effects" (deflation) would result from the devaluation of the dollar. Perhaps I should give you the benefit of the doubt by assuming that was a typo. You should expect the exact opposite relationship.

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Would you expect the opposite effect? In an open economy? Think real variables, not monetary, in a ceteris paribus world of neutral monetary policy.

If you still don't see why depreciation of the numeraire is deflationary, you may want to look up the real balance effect.

And if that doesn't do it either, nice meeting you!

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HofT wrote:

Would you expect the opposite effect? In an open economy? Think real variables, not monetary, in a ceteris paribus world of neutral monetary policy.

If you still don't see why depreciation of the numeraire is deflationary, you may want to look up the real balance effect.

I have to call you out, HofT. You're misusing jargon, and you're pretending you know more than you do.

Quote:

Effects of Devaluation
A significant danger is that by increasing the price of imports and stimulating greater demand for domestic products, devaluation can aggravate inflation. If this happens, the government may have to raise interest rates to control inflation, but at the cost of slower economic growth.

Source

No, currency devaluation doesn't always lead to inflation, but that's partially a function of the Fed's tinkering. Some might also claim that the relationship between currency devaluation and inflation isn't as strong as popularly thought, but I've never heard anyone sane claiming the opposite relationship.

Don't bluff online. Sooner or later you'll find someone who knows what you're talking about, even if you don't. I'm no PhD wielding economist, but I also never use jargon I don't understand, and I appear to have a much firmer grasp of economics than you. In any event, my wife has her PhD in econ., and she agrees that your posts don't make any sense. If you wish to contest this, please write a fuller argument rather than writing, "Steppenwolf, you should look at [fill in the blank with misused, random jargon]."

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That was a long time coming.

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If that's your wife's economics you're quoting, maybe she could try posting herself - you're completely unaware of the deflationary effects of a devaluation, obviously, and no amount of explanation will fill your "missing dots".

What's her Ph.D. in (precision, please, i.e. international, monetary, mathematical etc) and from which school?

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Ah, Free Duck is another mathematical economist? Awaiting her contributions to what seems to be a very crowded field today <G>

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No mathematical economist here. Just someone who is immediately suspicious of someone who is more concerned about their posts sounding intelligent than about getting their ideas across.

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Getting ideas across to whom?

All disciplines require some knowledge of technical terms, and I don't propose to teach an introductory econometrics class online.

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HofT wrote:

If that's your wife's economics you're quoting, maybe she could try posting herself - you're completely unaware of the deflationary effects of a devaluation, obviously, and no amount of explanation will fill your "missing dots".

What's her Ph.D. in (precision, please, i.e. international, monetary, mathematical etc) and from which school?

If you want to argue, then argue. You're spinning your wheels with all this stuff about my wife.

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Wheeeeeeeeeeeeeeeee!

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HofT wrote:

Getting ideas across to whom?

All disciplines require some knowledge of technical terms, and I don't propose to teach an introductory econometrics class online.

That may be true, but you consistently use technical terms incorrectly. I don't buy it.

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HofT wrote:

If that's your wife's economics you're quoting, maybe she could try posting herself - you're completely unaware of the deflationary effects of a devaluation, obviously, and no amount of explanation will fill your "missing dots".

Sounds like most of the world is unaware of the deflationary effects of a devaulation. Perhaps you could post some supporting evidence instead of simply calling Steppenwolf names?

HofT wrote:

All disciplines require some knowledge of technical terms, and I don't propose to teach an introductory econometrics class online.

If I had a nickle for all the times I heard someone refuse to explain their BS this way....

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Ah, King Arthur looking for a "nickle" (sic), and not finding either the "nickle" or any name-calling in my posts.... Keep looking.

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HofT wrote:

Ah, King Arthur looking for a "nickle" (sic), and not finding either the "nickle" or any name-calling in my posts.... Keep looking.

lol. Feel free to scrutinize all my posts for typos and misspellings. I'm sure I've made my share. Meanwhile, still no support for your BS.

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So, King Arthur, to sum up, on this thread we have 2 admitted non-economists, you and Free Duck, and one who thinks the discipline is contagious because he married someone with a Ph.D. in it. LOL sounds like a great assembly, please don't let me disturb your deliberations further - and Happy Thanksgiving to you all <G>

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And one who is so satisfied with her own intelligence and education that she can't be bothered to engage in actual conversation with the uneducated masses without condescension and personally insulting remarks. And who also apparently believes that a person cannot discuss economics without a ph.d. in the subject.

But it's all good. Happy turkey to you too.

Economic trends and their policy implications

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