if we go back to the same LRAS are we assuming that all those made unemployed, revise their wage and all decide to still take on jobs but at lower wages?
you said that the labor market always clears thus full employment level of output is at any equilibrium (labor market diagram) really. So why in your second diagram involving the LRAS is there only one particular level of output that is the full employment level of output?
if you were to live in the Roman ages, you would be one of the Roman lords, and they would call the lord of Macroeconomics (Macromeleus). Thanks a million. Exam is in two hours and I have never been that confident to sit an economics exam.
Cheers
P.S. the demand for you to teach in Auckland New Zealand is very high...
What if everybody was right? I think that the relation might depend of what type of employment - if a country have more employment in really hi-tech and really specialized domain, maybe the data will be more in favor of keynesian, but if it tend to be more generalist that it will tend to be more monetarist?
By the way....the KEYNESIAN diagram is not a 90-degree angle, it is a curve and second of all, it never enters the long run!!! Keynesian always stays in the Short run becuase these economists believe that, since price level will not change (due to not entering the long run), there will be some "excess" supply of goods and services which will later be fixed by any increase in demand....BUT NEVER ENTERING THE LONG RUN!!
@CLnomnom yeah, well theyre important in a way that you have to pass them. but uni's only look at predicted grades from yr 13 xmas exams^^ I GOT 2 EXAMS ON MONDAY I HOPE I PASS T.T
Through these 8 minutes I understood more about economics than in the 3 months with my new economics teacher. You saved my butt for the test tomorrow. A special thanks from Ukraine :D
LOL My econ prof never even showed us the keynesian LRAS curve. He's a hard core monetarist. Head's up for anyone going to the University of Calgary for Econ.
Thank you sir, I'm a student at a University of Washington studying economics and with your videos, I was able to understand the material better, even though I do have a great professor and I read my textbook. You're great at what you're doing. Blessings!
This is very much useful, brief and easy to understand unlike my teachers in school. That is why I had to result in this video. How sad are education nowadays.....
@getmadgetmad1 I don't subscribe to monetarist theory. How can you say that paper money only accounts for a miniscule proportion of the money supply when the dollar is based on nothing but the Federal Reserve's discretion? Most of the dollars circulating through the economy right now are checks that the Fed has written against itself. Look at money supply growth over the past 40-50 years compared to the previous 40-50; it's dramatic how much it has increased since Bretton Woods collapsed
@getmadgetmad1 Fluctuations in money supply are entirely caused by central banks that create money out of thin air. The economy would operate just fine, probably much better, if we did away with central banks and allowed banks to maintain full reserves. Full reserve banking is made possible by allowing money to be tied to a commodity (most likely gold and silver) and that alone would maintain a stable money supply because banks would be forced to redeem bank notes on par
Why do Monetarists care about whether or not wages fall? Should not deflation be viewed as good thing, in as far as prices fall back closer to their natural values? It seems that too much emphasis is put on increasing wages and not enough on increasing the value of the currency in which wages are paid. If the money supply were held stable, the value of money would increase relative to the productivity of the economy, am I wrong?
@EyeAmTheIlluminati deflation is a bad thing because as prices keep falling consumers delay their spending. eg. an iPod is £100 this week and next week it became £98, consumers look at this and think " Oh, i can it cheaper next week ill save my money" and its a continuous cycle, and that why minimal inflation is a good thing. if consumers delay spending eventually Aggregate demand will fall and the economy eventually also goes down.
Question about the keynesian way to boost aggregate demand. How can the government cut taxes and spend more money? For the government to spend more money wouldn't they have to increase taxes?
@asmodeian Governments are able to make surpluses in times of strong economic growth( higher taxes), and thus, as a form of Keynesian demand management, the Government can stimulate the economy through these savings and/or borrowing to pump prime the economy when demand is depressed.
Though the ideal method is by running a surplus in the growth years, and then running a deficit in the recession years. Over the long run they should be pretty close to even. Borrowing just switches it around though as always that means additional interest costs.
The US seems to have experimented with running a deficit during the good years - which hasn't worked out so well when the bad times arrived.
Thanks Phil! I have my IB economics exams in just a couple of hours. I've been using your videos for revision in addition to a revision guide and I feel really confident. Everyone in my eco class uses your videos. Big thanks from all of us!
So either the United States needs to commit tyranny and illegally redistribute Constitutional powers to private organizations that have unlimited and unregulated control over the nations economy, or the United States can be criminal free in allowing the economy to fix itself?
I'll pick the second option. Anyone who picks the first option seems like a communist to me. Anyways, look at inflation rates since the illegal revocation of the gold standard. Economic regulation is illegal + doesn't work
Peer-reviewed study finds Keynesian Paul Krugman is the most partisan economist. Krugman was the only economist to "significantly" change his stances for partisan reasons. Krugman has even gone so far as to contradict his own findings to bash Republican politicians.
The peer-reviewed research was published in May 2010 issue of the Econ Journal Watch (EJW), edited by Daniel B. Klein.
Seven Nobel laureates are members of the EJW Advisory Council.
Why do the keynesians believe that wage earners can't lower their wages in a free market, and thus clearing the market? Looking at old data of wages one can see that they have gone up and down (although the long term trend is up), so I'm a bit puzzled by their position.
Your videos are fantastic btw!!! can you clarify exactly where the philips curve fits into macro-economics, can one refer to it in the N-C model or is it usually used just for the Keynes approach...? Many Thanks
excellent explanation. i have a economics final in 28 days on unemployment, and you've just explained everything i need to know in 8 minutes, which i would have been revising for a month for! mucho appriciono
Your videos are really great to prepare for upcoming exams. Especially for people like me, who are not that into economics but have to study it (because European Studies also includes two courses of economics).
I always watch your videos when I'm studying economics, I got a B+ last semester thanks to these videos now I'm studying the IS LM model, Thanks for posting these vids there so helpful. Ann-Marie, Ireland.
wow since sep ive had six teacher depatures and i really though i was gonna fail economics paticually AS economics is quite hard however seeing ur vids i dont think im gonna do that bad after all thankssss
Hey Phil, thanks for the videos, can you please upload a video on LIQUIDITY PREFERENCE THEORY(determination of interest rates).I have searched it every where, no results.WAITING EAGERLY................................
You're such a brilliant man, a bloody shame it is that you've never been recognized for it (read: having a better job). If you chose not to pursue a career, you can just ignore what i just said
Well, thanks. If you mean by other jobs perhaps something in finance, thanks but I love what I do. I am very comfortable materially, I have seaside, mountain and city centre homes, a nice car and 16 weeks holiday a year. Thankfully, I and my family are healthy and we want for nothing. To cap it all, I have a job which is fulfilling and really feels worthwhile. I am recognised for the quality of my work every day. To conclude, I am the luckiest man alive and remind myself of it every day.
If u were in some other jobs, probably we hadn't been able to get such brilliant videos from you..I am a economics student, so i know how valuable your videos are...Keep up the good work man.
@pajholden Beautifully said! Recognition comes in different shapes and sizes. Your family is lucky to have you, and vice versa. On another note, I was hoping you have videos on IS-LM curves...
Beautifully said, pajholden! Recognition comes in different shapes and sizes. Your family is lucky to have you, and vice versa. On another note, I was hoping you have videos on IS-LM curves...
@pajholden Beautifully said, pajholden! Recognition comes in different shapes and sizes. Your family is lucky to have you, and vice versa. On another note, I was hoping you have videos on IS-LM curves...
@pajholden Where do you teach econ? That job description sounds fantastic, and I'm so much of a nerd I watch econ videos for entertainment. I might be a little austrian leaning which you don't seem to have much content about, but ill forgive you.
Thanks for the help. I have one tip though. Your Whiteboard is so huge and you only use up a quarter if it. Why dont you draw the double size then the audience could actually read the graphs
What is completely missing from this entire presentation is what effect fractional-reserve lending and interest rates will have upon capital investment, Why are businesses forced to shed labor? How can robbing from Peter to pay Paul (fiscal policy) have any effect other than robbing other sectors of the economy? How can the ability to multiply money not have a detrimental effect on the whole of the economy? To focus upon only unemployment is to miss the forest for the tree.
Exactly what I thought. Keynsianism and Monetarism are not diametrically opposed, Keynes never advocated subsidising an economy, permanently, with redistributive and demand side economics. The only thing between them is that Friedman would have argued for tighter monetary control to maintain monetary equilibrium during a boom, to prevent inflation-but would Keynes have argued against that? Not if he saw the British banks fuelling overheated speculative markets with utterly free credit
well Keynesian economic thought is demand side economics. "Keynes believed that the government should become the demander of last resort" Mankiw. I think part of the problem wiht keynsianism is Keynes did not throughly analyze the power of monetary manipulation, and instead focused almost solely on fiscal stimulus and demand.
Although I believe the very NOTION of trying to increase demand in an economy as not only fallacious and impossible without inflation (thereby making it a fallacy) but utterly destructive to human dignity. I really despise demand side economics in general.
Monetarism is an offshoot of Classical/New-Classical economics. So monetarists believe that there would be clearing wages, similar to classical economist theory.
What causes unemployment anyway? That should be the centerfold of economic analysis: Real question for real solution instead of abstract pseudo scientific inquiries! What are the mechanism that leads to unemployment, recesssion, depression...etc? That's why I hate both Keynesianism and its cousin Monetarism!
Austrian economics rules the world and has proven so by predicting this crisis while the other ignoramus were looking at their graphs and charts
Idiot! From which planet did drop from? Show me, in the real world an instance " of full employment"! We are talking about real occurrence buddy, not some pseudo-intellectual fabrication. " What do you mean by Natural rate of unemployment"? In the real world, once again, in a realistic society, there will always be some unemployed people ( Eldery, disabled, sicks, mentally deranged, lazy people, teen, pregnant, women...etc) By the way moron, I have 2 degrees already and getting one more!
Austrian you mean Hayek sch of thought and thereby embracing free market capitalism . During recession, your LM will be flat as changes in interest rate do not entice investment. Most ppl would hold on to their cash. If this free market idea preceeds then we will be in long term unemployment. Hate keynesian, you shouldn't, knock off money rule you don't. You need different tools for different economic problems. Btw, can't really write every type of unemployment out here cuz I'm limited by words.
Your videos have really have really helped during by first year Micro class. I am having trouble understanding the Supply and Demand curves. If its not too much trouble, can you do a video on supply and demand shifts etc.
this is true however unemployment insurance can be a good thing for the economy n the long run as people have more time to find a job that meets their skill sets. this there is less under-employment. i would rather have an experienced engineer making buildings than working in a textile factory.
That's why i base my principals and assumptions on proven facts I.e. Psychology, and Sociology both social sciences. These subjects tell me people are not rational the develop cognitive biases and heuristics, heuristics are "rules of thumb", educated guesses, intuitive judgments or simply common sense. but are not always the optimal choice. people are cognitively lazy and for this reason do not behave like the homo economicous. one constant theme of psychology is human irrationality.
Austrian School is a pseudo science. doesn't use math and is untestable. Economics is a social science, it is the study of decision making, praxeological axioms are assumptions not based on any fact.
Economics is firstly and uniquely a "science of human" choice and decision. Individual subjectivity guide their decision making process. There is no constant in the complicated psychology of people; and two given people put in the same situation will or might always act differently given their own unique appreciation of matter. Try to make economics a mathematical science like physics is plainly stupid. Math and graph can play a role in an historical and statistical analysis; but, not more!
coordination failure, cost based pricing with lags, delivery lags, implicit contracts with customers, explicit contracts with employees and customers, menu costs( the cost of changing the price of the product) procyclical elasticity of demand, and pricing points (i.e 2.99, 19.99 certain prices have special psychological significance.) this stickiness means that there will be high unemployment until expectations fall or demand increases.
The main question is do people have rational expectations or adaptive expectations, if they are rational than a monetarist/ new classical outlook on the world makes sense, however if they are adaptive than people may take long time to change their expectations. Also because prices are sticky in the short run for a whole host of reasons including ...
I would argue that people "take long time to change their expectations" because of Unemployment Insurance [U.E]. I would argue this because I am in the position, where I make more on U.E, than I would at a $10hr job. I could pick one up TODAY, but of course I'm not going to rush to the first $10hr job, when I can hold out and try for something better. If your previous salary was over $30k, YOU MAKE MORE THAN $10hr on U.E. Factor in Childcare, and there's an even larger disparity.
well clearly there are more dimensions possible such as expenses, but either way both cut expenses surely, monetarist via lower wages and keynesian via unemployment
there actually is a subfield called behavioral economics which bases economic theories on psychology and these theories are supportive of the mathematical framework in which we analyze our world. other social sciences use mathematics including psychology, sociology and poly sci, why cant economics
chooky is right. i don't know you afriktoday but im going to make an assumption, as we so often do in economics, so here it is, people far more intelligent and far more powerful than you, sat in governments across the world acknowledge keynesian and monetarist policies to be the most effective, so why should anybody listen to a rowdy youtuber? go and release your venom elsewhere and stop ruining a fantastic video. (by the by, thanks phil for these comprehensive and frankly crackin vids)
Well, if everybody thought like you, we would still be living with the canon Law of the catholic church over our head! These were the people who " sat together, brilliant and powerful as you stated, and decided the dogmas of the Christian Church" That's just an example! My point is simple, like Mises stated ( I just red him today again) "Despot and democratic majority are drunk with power... they reject the very notion of economic law." Why do politician support bills? To get reelected!!
Check out alevelblog . com - Blogging my way to university! Revision techniques and those important University application questions you've always wanted answering!
your all douches... oh look at me i have a phd... dope. austrian school... speaks for itself. stop fucking fighting on phils lecture videos... hes a serious man!
Long live the National Minimum Wage! Let's remember that we are all human beings and that in the real world businesses exploit workers - the NMW ensures a fairer wage for the work you do. Economic theory should be taken with a pinch of salt and a guideline to running an economy - not an absolute! We would all be in a worser situation if the market was left to its own devise.
the single best comment on this video. Economic theory should not only be taken with a grain of salt but challenged when it's total rightwing rubbish like monetarism...
Keynes was a socialist to start with. And I find it foolish to try to resolve "unemployment"! Unemployment is a constant in a society and cannot be calculated! Both the Keynesians and monetarists are fools and imbeciles. If really want to LOWER unemployment, cut off the minimum wages clause that prevent entrepreneurs from hiring a new work force! The market has to be open, free without any sorts of socialist intervention.
Minimum wage prevent the entrance of a cheaper workforce into the workplace; therefore keeping unemployement relatively high. During crisis, it is even more important to get rid of minimum wage or union contract because they hinder the ability of companies to restructure their capital and even keep their employees. One of Ford, GM and Chrysler main problems are due to their Union contracts. Their employees are overpaid comparatively to Toyota's and Honda's. No need for Physics to understand.
speaking as a monetarist, it is crucial that there always be a minuimum wage, otherwise workers will work for less in an increasingly competitive market driving down living conditions and GDP. Such a free market mechanism would revert people to the informal economy, which is only bad and records prove this often leads to increased crime, its ridiculous to suggest the abolishment of the minimum wage the cons simply far outway the pros in any state of the economy.
It is very simple: People have to be paid accordingly with their skill level. There many people who are willing to enter the workforce but are constricted because of their low skill level than cannot be matched with employers. The minimum wage prevent these people from accessing the work force! And, why not set the minimum wage at $10? What is the logical explanation to set a minimum wage at one level and not at another? Does make sense and is counter productive!
This simply isn't true, they meerly disagree with some effects of demand on circumstance, for example keynesians basically feel that people won't be so keen to drop their wages, which logically is a believable thing, in fact the main argument boils down to a factor of time as in a serious slump workers must revise their wage expectations.
And, this is a typical characteristic of neo-keynesians and so called monetarists. They focus one just one random aspect of the economic picture and then generalize their conclusions. The minimum wage is related to over taxation, regulation and fractional reserve banking system and they all form a web that restrict the normal evolution of the market place. Getting rid of all these road blocks will only beneficial to the entire national economy, thus allowing more people to gain work!
This is true, abolishing the minimum wage will inviegle foreign direct investment and more jobs. But its quite absurd to realisitcly suggest terminating the minimum wage, GDP would plumit, living standards would be equivalent to that of a third world country (working for nothing), people would much rather not work and claim benifits than finding work this way, thus making the situation worse in both the short and long term, hows that for focusing on "one random aspect".
Dude, have you ever red an economics book? What creates jobs? What are the factors that allow a particular social environment to be more productive than another? What is the difference between Japan and France for example? Come on!
Wage are just one aspect of a much more larger body of economics. If you abolish minimum wage but maintain an expensive welfare system, of course there will be dire repercussion. But if abolishing that nonsense goes along lowering taxes...
lowering taxes, relaxing the regulations and establishing a sound monetary system, there will be no need for "minimum wage", for individual will be able to freely compete for the best paying jobs and entrepreneurs will be able to establish productive business with good pay even for the less educated. You cannot just pick one aspect of the market and explain the aggregate. It is simply illogical! Keynesianism is socialism purely and simply and anti- free market!
You talk about illogical, and you say the "anti - free market" is illogical...this just isn't true, the correct term for what you are refering is a command economy btw, and having this structure to an economy will do nothing but ensure greater stability, fairer wages and living standards and equal oppertunities for jobs. It is far more sensible than any free market mechanism.
Command economy?? What is that? Where do you draw the line of "command?" Where do you set thee bare of minimum wage? Do the bureaucrat possess an aspect of market knowledge that the owners of businesses and potential entrepreneurs " just don't possess?". Are you implying that the entrepreneurs are just a bunch of greedy profiteers who will set the wage as low as possible in order to maximize their profit margin? Sorry dude! I just do not agree with that logic!
Of course thats what i'm saying, people go into business for one reason, and like it or not, thats profit. If they can get labour for a cheaper price why would they offer more for the service?? if you are confused by the basic term command economy then i suggest you look it up...
Although free market principles originated in Europe, that subcontinent has been for century now the home of a socialistic mindset that portray the entrepreneur as the ultimate evil and the state as the greatest equalizer. I don't know what the like of Frederic Bastiat, Jevons, and most of father of classical economy will think of your comment:"We need bigger government"! This is Keynesianism at its perfection! Sorry but you are purely and simply a socialist.
A muscle spasm represent the bursting of a bull market and, the resting period represent a "recession". Recession is the cleaning up of the system and all the malinvestment that occurred during that period of overexcitement! The intrusion of a government 'stabilizing" policy can only worsen and extend the period of readjustment. That's why the USA great depression lasted 15 years while the 1919 crisis lasted only 1 years. Economics is logical and simple to understand; Keynesianism is a fallacy.
My point is that everyone should be able to benefit to the greatest extent possible from the fruits of his own labor! If someone is engineeous enough to create a business that earn him billions, he should be able to enjoy his invention without some bureaucrat assailing him with taxations because he is rich. Although the USA has been clearly falling into that socialistic mindset, I must admit that europe is far worse! There is no such a thing as mix market economy! Where do you draw a line?
As for your theories regarding minimum wage, while relaxing regulations and tax's would undisputedly increase investment and therefore jobs. There is still absolute need for a minimum wage, many workers would be taken advantage of for cheap labour, regardless of point of view this just isn't acceptable, its called a negative externality, where the social costs far outway the benifits.
You have to remember the single greatest period of industrial and social development in the USA took place during the second half of the 19th century and there was no "command economy" whatsoever! Unemployment was below 1%! Never before seen in the US or world history! Ever since we have embarked in the so called mix market system, we have actually destroyed our industrial base, expanded the government and increased the welfare recipients! There is no better socialism that free market!
Can you not see that without a government and the mixed market, when the economy hits a downturn or recession, it will be magnified no end, i dread to think of the effects. If anythink we need bigger government, and more fiscal and monetary power for them. I should say now though i'm not from America.
Entrepreneurship implies taking risk in order to provide a service. It requires hardwork and adjustment to technological and social changes! Most business owners work harder than they employees! Why shouldn't they be rewarded for that effort? Why should a government overtax them because they are supposedly "rich"! This is a mean of hindering the most productive member of the society! You cannot have a mix economy while you have Chineses and asians jumping on the wagon of free market!...
You also got in wrong on the "magnified issue your stated"! I do not really understand the logic of that term in regard to a recession; the truth is that you do not even understand what a recession is to begin with. When you go to the gymn and workout beyond your strength, you often suffer from muscle spams. You need "a medecine" in a form of rest in order to get back to the gymn again and continue your healthy exercise. This is the same thing in economics!
omg i can't even be bothered to argue anymore against someone so ignorant, of course the effects of a recession will be amplified or magnified without a government to stabilise the economy. Furthermore i don't no from where you get the knowledge and experience to declare keynesianism fallacy and wrong when so many governments and world leaders follow its policies, its economics at its most logical, i suppose your a right wing monetarist
Talking about ignorance! Remember the concept of Liberalism? Ever heard of of Austrian economics? I would advise you to search into that school of thought instead of presupposing that I am a monetarist. To me, Monetarist are nothing but neo-keynesians and a bunch of socialist regardless of the so called liberal ideas they might support. Keynesianism became popular only because it justified government intervention; just like socialism on a broad spectrum is very much still popular!
It is a shame that Europe, the birth place of classical liberalism has been overtaken by Keynesianism ( Socialism) to the point where many like you feel at lost when they encounter the principles that were at the foundation of the industrial and social development of Western society around the 18th and 19th century. Ever heard of Jean Baptiste Say, Frederic Bastiat, Stanley Jevon, Anne Robert Jacque Turgot, I can even go as further as Richard cantillon...etc. You really got a lot to learn about!
You should keep going with your small time and illogical beliefs good look convincing world leaders, decorated economists and professors that keynesianism is this wrong. You paint us as being as extreme as communists, but i'm proud to be a socialist, its fundamentals make sense and government makes this a better world.
A rational person check for the proofs instead of drawing conclusions just for the sake of protecting his beliefs. " Its fundamentals make sense and government make this a better world!"
Dude, are you serious? Have you looked at the world around you? which better world are you talking about? What is the situation of UK nowadays? I guess you are floating into a trade surplus and your society is an example of peaceful egalitarianism. Nonsense dude!
I know a great Keynesian and his name is "robert Mugabe!" Believe me, everyone is a billionaire in Zimbabwe! Argentina, Iceland and England is the next in line! Have you seen the social inequity around you or do you need glasses? Africa? Asia, south America? They are having it great over there don't they? Isn't the world bank doing a great job advising them? Dude, use your rational ability instead of expecting answer from "great economist". Keynesianism is a fallacy once again and once for all!
Robert Mugabe isn't really an example of a great keynesian, in fact the policies he implements arn't keynesian at all, you're just trying to associate infamous facists with keynesianism, quite cheap and a desperate argument. Believing in a free market, i can see you have faith in the people, a faith that is no longer justified.
You want to live in a state heaven, move to north Korea or in Cambodia! Sorry but your amateurism is pathetic and I wonder if you even understand the simple principle of Say's Law. As far money is concerned; the blame has to be trust on central banks, who were responsible for making money too easy to banks to loan for consumer to spend. That's it! Unfortunately, because of the fractional reserve banking system, debt is MONEY! A sound money is at the core of Austrian economy!
And there you go again refering Keynesianism to marxism, you should understand that they are two different groups of economists. Ask yourself why every keynesian hsn't moved to counties like north korea, because as a group essentially they are in favour of more government power, but not total totalitarianism! I think that is your main issue, and wha you must understand.
First, there are more than hundred school of economics thoughts that have grown over the centuries. Post Keynesian fallacies are just the most common nowadays ( Look at the stature of the western nations that have embraced them). True economics is Libertarian economics. Austrian economics. The government has a very little role to play in economy solely because that activity revolve around INDIVIDUAL CONSCIOUS AND RATIONAL ACTIONS. That's it! Government interference can only cause troubles.
Thats crap and sureley you realise it, no one can be that ignorant, "government interference only causes trouble", you really are on your own there...where would we be without fiscal and monetary policies to boost the economy and standard of living, where would we be without education and health stimuli!
Man oh man are you ignorant!! Tell me an example of "fiscal and monetary policy" that has ever boosted A NATION ECONOMY? PLease I beg you to show me JUST ONE EXAMPLE!!I guess you love paying your taxes TO THE QUEEN SO THAT SHE CAN MAINTAIN HER HIGH LIVING STANDARD! I wouldn't give a penny to God himself! It is my MONEY, I have earned it! Education and health stimuli? The free market can take care of that! Best schools: Public or privates? Getting the gov out of the way will lower the costs!
Also, Fractional reserve banking system is a the cause of inflation and social inequities that are so prevalent around the world nowadays. The super rich, backed by the power hungry government are working to maintain their influence over the majority of people who are struggling to get by. Most countries around the world are witnessing an increase in living standard relatively with wages. That's inflation. I wouldn't even ask you the cost of a cup of coffee in LONDON!
Also, Mugabe is a damn Keynesian to the core. What did he try to do when his country got in trouble? He printed more money!! That's the solution proposed by most government around the world!! Dude, you have no understanding whatsoever of ECONOMICS! Human action are at the center of the economic process, not government policies! The role, the basic role of the government is to maintain and protect the rights of individuals and protect a nation in case of aggression! That's it!
The last time I checked the pound had lost a lot of its value, there are a lot of social strifes and a rebirth of "Nationalism"; your welfare society is taking its toll over the productive members of the society who are leaving your country for less taxing countries. Your education system is one of the most expensive in the world, you have no industrial basis, you public debt is huge and your government is carrying a deficit...etc That's keynesianism my friend! Better world? Kidding right!
There's no use drawing proofs, you just blindly refute them. I'm quite serious about my comment yes, for god sake if it wasn't for governments bailing us out then we would have no economy. Your quite keen to blame government for all this, but all you have to do is look at the causes of this recession...The banks, private sector businesses headed by selfish entrepreneurs and greedy shareholders getting profits at any and all costs. Thats common sense and fact.
Sorry but your outlook is extremely flawed to begin with. You have not understanding whatsoever of monetary policy and your claims are simply and pathetically out of Karl Marx "das capital"! Since you do not live in North Korea, I will argue that you are permitted to write your nonsensical pseudo-economics comments on the internet because "someone in private sector" is providing you that service. The shoes you are wearing, the cab, bus, food,...etc That's from the private sector!
Thankyou for reminding me where i purchase my goods, and OMG no western country is going to print more money, and i dont know where you've heard thats keynesian policy, but i'm afraid its just not i can very much asure you of that, so don't say i've no understanding when clearly you need to go off and do a little more research into government policies you fucking idiot.
Well fuckhead, I was answering on your skepticism about "people" I guess it is the government that his providing you with the daily means of life! That was my point! Government policies? Are you out of your head? Which government? What about individual policies? What is a Keynesian policy? I mean, what is Keynesianism? Maybe I am socialist and you are a free market Libertarian?Educate my ignorance please!
i'm refering to government policy on printing more money to combat economic downturns, and it is wideley recognised by all knowledgable people that printing more money is the last resort of a desperate country such as zimbabwe. And when i say policies i mean solutions to different problems or causes to different problems.
What is the difference between Mugabe printings and the bank of England printings and bailouts? It is ALL PRINTING! The only difference is that THERE IS NO LEGITIMATE TRUST AND CONFIDENCE in Zimbabwe economy comparatively with relatively and historically stable nation in Europe. But the result are the same? Inflation; hyper inflation in Zimbabwe of course! Printing money is not A SOLUTION, it is a DESTRUCTION OF AN ECONOMY regardless of how and where it is OPERATED!
Thank you so much!!!
dasharpest92 1 month ago
Paj, you make the best videos!!!!!! THANKS SO MUCH!!!!!!
miskmiskm 3 months ago
i subscribed to you. This is so going to be useful for my IB exam in may!!!!
TheBlastBR 3 months ago
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tbotrouble6 4 months ago
if we go back to the same LRAS are we assuming that all those made unemployed, revise their wage and all decide to still take on jobs but at lower wages?
motters2012 5 months ago
you said that the labor market always clears thus full employment level of output is at any equilibrium (labor market diagram) really. So why in your second diagram involving the LRAS is there only one particular level of output that is the full employment level of output?
motters2012 5 months ago
ur videos are really awesome.. i have got the confidence to read Macro economics.. thaanks to u sir.. Rock ONNN sir..
Bhaveshagarwal89 6 months ago
this was absolutely fantastic. if i could hug you i would. perhaps settle for an ehug?
carrotxdawg 6 months ago
if you were to live in the Roman ages, you would be one of the Roman lords, and they would call the lord of Macroeconomics (Macromeleus). Thanks a million. Exam is in two hours and I have never been that confident to sit an economics exam.
Cheers
P.S. the demand for you to teach in Auckland New Zealand is very high...
srubaiani 7 months ago 7
@srubaiani I like the sound of that!
pajholden 7 months ago
What if everybody was right? I think that the relation might depend of what type of employment - if a country have more employment in really hi-tech and really specialized domain, maybe the data will be more in favor of keynesian, but if it tend to be more generalist that it will tend to be more monetarist?
Or do I get something wrong here...
therrydicule 7 months ago
By the way....the KEYNESIAN diagram is not a 90-degree angle, it is a curve and second of all, it never enters the long run!!! Keynesian always stays in the Short run becuase these economists believe that, since price level will not change (due to not entering the long run), there will be some "excess" supply of goods and services which will later be fixed by any increase in demand....BUT NEVER ENTERING THE LONG RUN!!
AmazingDudeVideoMake 7 months ago
Thankyou so much
SolaAdeyemi 8 months ago
YOU MATE U R A GENIUS. A GREAT GUY WHO MAKES ANYONE BUT ME UNDERSTAND THIS IS A LEGEND. LETS JUST HOPE THE EXAM AINT HARD :)
game2game101 8 months ago
Which do you think is the right one?
spotify9999 8 months ago
how much did i spend on tuition for IB classes when i could've just watched your tutorials??
LIFE SAVER! IB Economics exam tomorrow and i feel a lot better!
hibaganta 8 months ago
@hibaganta IB exam tomorrow and this guy just saved my life.
CLnomnom 8 months ago
@CLnomnom lol gd luck I'm passing my IB next year -.- 12th grade exam are so important though
milesjordan239 8 months ago
@CLnomnom yeah, well theyre important in a way that you have to pass them. but uni's only look at predicted grades from yr 13 xmas exams^^ I GOT 2 EXAMS ON MONDAY I HOPE I PASS T.T
CLnomnom 7 months ago
Mr. HOLDEN, WHY ARE YOU GOING TO BE A FARMER.... :(
Snnx27 8 months ago in playlist Economia
Through these 8 minutes I understood more about economics than in the 3 months with my new economics teacher. You saved my butt for the test tomorrow. A special thanks from Ukraine :D
norajoe5605 8 months ago
LOL My econ prof never even showed us the keynesian LRAS curve. He's a hard core monetarist. Head's up for anyone going to the University of Calgary for Econ.
jpat911 8 months ago
Thank you sir, I'm a student at a University of Washington studying economics and with your videos, I was able to understand the material better, even though I do have a great professor and I read my textbook. You're great at what you're doing. Blessings!
dollfill 9 months ago
This is very much useful, brief and easy to understand unlike my teachers in school. That is why I had to result in this video. How sad are education nowadays.....
LadyDancer55 9 months ago
paj holden man i love you... no homo
mriraqidude2 10 months ago 7
thanks for the video
chungsta2046 10 months ago
Nice video mate. Summed up all the key points nicely. Good job (Y)
wimanwimanwimanwiman 11 months ago
@getmadgetmad1 I don't subscribe to monetarist theory. How can you say that paper money only accounts for a miniscule proportion of the money supply when the dollar is based on nothing but the Federal Reserve's discretion? Most of the dollars circulating through the economy right now are checks that the Fed has written against itself. Look at money supply growth over the past 40-50 years compared to the previous 40-50; it's dramatic how much it has increased since Bretton Woods collapsed
EyeAmTheIlluminati 1 year ago
Thanks for the help.
OopsFailedArt 1 year ago
@getmadgetmad1 Fluctuations in money supply are entirely caused by central banks that create money out of thin air. The economy would operate just fine, probably much better, if we did away with central banks and allowed banks to maintain full reserves. Full reserve banking is made possible by allowing money to be tied to a commodity (most likely gold and silver) and that alone would maintain a stable money supply because banks would be forced to redeem bank notes on par
EyeAmTheIlluminati 1 year ago
Why do Monetarists care about whether or not wages fall? Should not deflation be viewed as good thing, in as far as prices fall back closer to their natural values? It seems that too much emphasis is put on increasing wages and not enough on increasing the value of the currency in which wages are paid. If the money supply were held stable, the value of money would increase relative to the productivity of the economy, am I wrong?
EyeAmTheIlluminati 1 year ago
@EyeAmTheIlluminati deflation is a bad thing because as prices keep falling consumers delay their spending. eg. an iPod is £100 this week and next week it became £98, consumers look at this and think " Oh, i can it cheaper next week ill save my money" and its a continuous cycle, and that why minimal inflation is a good thing. if consumers delay spending eventually Aggregate demand will fall and the economy eventually also goes down.
malikidmc 9 months ago
Socialism = Creationism
Keynesian Economics = Intelligent Design
Austrian Economics = Evolution
watch?v=MnekzRuu8wo
watch?v=EgMclXX5msc
Don't be fooled. Vote Ron Paul 2012.
TheAttackRat 1 year ago 3
@TheAttackRat how is Austrian Economics = Evolution and
Keynesian Economics = Intelligent Design
istraight1 1 year ago
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drhfhfvxdvx 1 year ago
woah I didn't know Keynesians where so weird
MirageScience 1 year ago
@MirageScience Darling they are in the white house! Haven't you seen how weird they are by now???? And destructive.
Turkeysucks2010 1 year ago
@Turkeysucks2010 Oh I noticed how destructive.
MirageScience 1 year ago
Thank you very much!
God bless you.
esazaa 1 year ago
@pajholden Got an A in Alevel Economics. Thanks for all your videos, they helped alot!
Chetonomist 1 year ago
KeynesiaN Econonomics Needs To Die FOREVER!
WingThaiJ 1 year ago
Question about the keynesian way to boost aggregate demand. How can the government cut taxes and spend more money? For the government to spend more money wouldn't they have to increase taxes?
asmodeian 1 year ago
@asmodeian Governments are able to make surpluses in times of strong economic growth( higher taxes), and thus, as a form of Keynesian demand management, the Government can stimulate the economy through these savings and/or borrowing to pump prime the economy when demand is depressed.
LetsBeChange 1 year ago
@LetsBeChange You are the only other person on Youtube who seems to get it LetsBeChange...
sandrofrei1 1 year ago
@asmodeian either or not both. increase govt spending to boost G or decrease taxes to promote consumption/investment spending C or I.
SoberRuzki 1 year ago
@SoberRuzki Thanks for the info guys.
asmodeian 1 year ago
@asmodeian either or not both. AD = C+I+G+X-M. you either increase G to boost AD or you cut taxes in order to increase C and/or I.
SoberRuzki 1 year ago
@asmodeian not true, governments can cut taxes and increase spending, to do this they can borrow money.
kkmarivate 1 year ago
@asmodeian
Borrowing or printing.
Though the ideal method is by running a surplus in the growth years, and then running a deficit in the recession years. Over the long run they should be pretty close to even. Borrowing just switches it around though as always that means additional interest costs.
The US seems to have experimented with running a deficit during the good years - which hasn't worked out so well when the bad times arrived.
jedfa987 1 year ago
economics exam tomorrow, little time to revise. words can't describe how happy i am to stumble across your videos! wish me luck!
Whoshotmyrifle 1 year ago
All your video's make diamonds out of coal i.e. everything is so much clearer
Thank you so very much for all you help, and count me in for that pub crawl ;-)
tompooleuk 1 year ago
Thanks Phil! I have my IB economics exams in just a couple of hours. I've been using your videos for revision in addition to a revision guide and I feel really confident. Everyone in my eco class uses your videos. Big thanks from all of us!
RememberSeptember 1 year ago
So either the United States needs to commit tyranny and illegally redistribute Constitutional powers to private organizations that have unlimited and unregulated control over the nations economy, or the United States can be criminal free in allowing the economy to fix itself?
I'll pick the second option. Anyone who picks the first option seems like a communist to me. Anyways, look at inflation rates since the illegal revocation of the gold standard. Economic regulation is illegal + doesn't work
SadegoGG 1 year ago
Peer-reviewed study finds Keynesian Paul Krugman is the most partisan economist. Krugman was the only economist to "significantly" change his stances for partisan reasons. Krugman has even gone so far as to contradict his own findings to bash Republican politicians.
The peer-reviewed research was published in May 2010 issue of the Econ Journal Watch (EJW), edited by Daniel B. Klein.
Seven Nobel laureates are members of the EJW Advisory Council.
islandmuffin 1 year ago
Why do the keynesians believe that wage earners can't lower their wages in a free market, and thus clearing the market? Looking at old data of wages one can see that they have gone up and down (although the long term trend is up), so I'm a bit puzzled by their position.
Lavklumpen 1 year ago
Thanks! Very clearly explained.
MyQwerty44 1 year ago
thank you! adaptive and rational expectations fall under monetarist view.... and i finally understood it...
Balkance 1 year ago
thank god... i finally found a youtube channel about economics that isn't all conspiracy theory "federal reserve is satan" bullcrap.
timgeerdes 1 year ago 4
If I get an A in AS economics all credit goes to you and your videos. Thanks for existing.
Can I tag along with you and Ghandi on the pub crawl?
thorpa01 1 year ago 14
@thorpa01 Don't thank me - thank my parents
pajholden 1 year ago 2
@thorpa01 Don't thank me - thank my parents
pajholden 1 year ago 17
@pajholden can i contact your parents.. i need to thank them...
Bboys007 8 months ago in playlist Economics Unit 2 aqa
Your videos are fantastic btw!!! can you clarify exactly where the philips curve fits into macro-economics, can one refer to it in the N-C model or is it usually used just for the Keynes approach...? Many Thanks
MrDankeil 1 year ago
excellent explanation. i have a economics final in 28 days on unemployment, and you've just explained everything i need to know in 8 minutes, which i would have been revising for a month for! mucho appriciono
timturnnips 1 year ago
Your videos are really great to prepare for upcoming exams. Especially for people like me, who are not that into economics but have to study it (because European Studies also includes two courses of economics).
Greetings from the Netherlands!
vTVBerlin 1 year ago
I always watch your videos when I'm studying economics, I got a B+ last semester thanks to these videos now I'm studying the IS LM model, Thanks for posting these vids there so helpful. Ann-Marie, Ireland.
xxannmariedixonxx 1 year ago
wow since sep ive had six teacher depatures and i really though i was gonna fail economics paticually AS economics is quite hard however seeing ur vids i dont think im gonna do that bad after all thankssss
:-D
liverpoool4lyf 1 year ago
Hey Phil, thanks for the videos, can you please upload a video on LIQUIDITY PREFERENCE THEORY(determination of interest rates).I have searched it every where, no results.WAITING EAGERLY................................
MrUsa123456789 1 year ago
You just got me into studying mode again. Thanks so much for your video explanations!!!! Huge greetings, Dr!!!
israel1501 1 year ago
i'm not on the Nobel prize committee mate but if i ever am i'll f*cking make sure your videos get the prize for economics!! cheers!
mahatmaghandi69 1 year ago 9
cheers! If I win it we'll go on a massive pub crawl with the winnings! Thanks for your support - Phil
pajholden 1 year ago 3
All the videos are very helpful, Thanks a lot.
You are doing a great job.
MrManishthapar 1 year ago
You're such a brilliant man, a bloody shame it is that you've never been recognized for it (read: having a better job). If you chose not to pursue a career, you can just ignore what i just said
patatmetkip 1 year ago
Well, thanks. If you mean by other jobs perhaps something in finance, thanks but I love what I do. I am very comfortable materially, I have seaside, mountain and city centre homes, a nice car and 16 weeks holiday a year. Thankfully, I and my family are healthy and we want for nothing. To cap it all, I have a job which is fulfilling and really feels worthwhile. I am recognised for the quality of my work every day. To conclude, I am the luckiest man alive and remind myself of it every day.
pajholden 1 year ago 40
WOW so inspiring! now i can sleep at night! no im joking thanks for the video
70925007 1 year ago
If u were in some other jobs, probably we hadn't been able to get such brilliant videos from you..I am a economics student, so i know how valuable your videos are...Keep up the good work man.
ksk235 1 year ago
@pajholden Beautifully said! Recognition comes in different shapes and sizes. Your family is lucky to have you, and vice versa. On another note, I was hoping you have videos on IS-LM curves...
baacjad 1 year ago 3
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Beautifully said, pajholden! Recognition comes in different shapes and sizes. Your family is lucky to have you, and vice versa. On another note, I was hoping you have videos on IS-LM curves...
baacjad 1 year ago
@pajholden Beautifully said, pajholden! Recognition comes in different shapes and sizes. Your family is lucky to have you, and vice versa. On another note, I was hoping you have videos on IS-LM curves...
baacjad 1 year ago
@pajholden Where do you teach econ? That job description sounds fantastic, and I'm so much of a nerd I watch econ videos for entertainment. I might be a little austrian leaning which you don't seem to have much content about, but ill forgive you.
jimbo525SE 8 months ago
what is the difference b/w accelerator and multiplier effect?
MrSweetchoklet 1 year ago
accelerator has to do with investments, however, both are greatly effected by the confidence of consumers/investors.
MetalSupra1982 1 year ago
Thanks for the help. I have one tip though. Your Whiteboard is so huge and you only use up a quarter if it. Why dont you draw the double size then the audience could actually read the graphs
zUkUnFtsBeAt 2 years ago
damn that bell scared me !!!
yeshodeep 2 years ago
What is completely missing from this entire presentation is what effect fractional-reserve lending and interest rates will have upon capital investment, Why are businesses forced to shed labor? How can robbing from Peter to pay Paul (fiscal policy) have any effect other than robbing other sectors of the economy? How can the ability to multiply money not have a detrimental effect on the whole of the economy? To focus upon only unemployment is to miss the forest for the tree.
jaffijoe 2 years ago
this was extremely helpful, though the graphs were a bit small, the explanation was great
slartibartfast1992 2 years ago 3
That helped me understand it a lot more. It was a lot clearer than how my teacher explained it. Thanks. :)
pineycheerleader 2 years ago
3:23 ahhh that scared me
hpsfl 2 years ago
Very Good! Very Helpful
evanlemmon 2 years ago
I thought that only classicals believed wages would clear, and both monetarist and Keynesians believed prices to be sticky in the short run.
mikeyooh7 2 years ago
And isnt the short run defined as a period of steady prices (sticky) and as soon as those prices adjust it would become the Long run.
mikeyooh7 2 years ago
Exactly what I thought. Keynsianism and Monetarism are not diametrically opposed, Keynes never advocated subsidising an economy, permanently, with redistributive and demand side economics. The only thing between them is that Friedman would have argued for tighter monetary control to maintain monetary equilibrium during a boom, to prevent inflation-but would Keynes have argued against that? Not if he saw the British banks fuelling overheated speculative markets with utterly free credit
Nintendomanwill 2 years ago
well Keynesian economic thought is demand side economics. "Keynes believed that the government should become the demander of last resort" Mankiw. I think part of the problem wiht keynsianism is Keynes did not throughly analyze the power of monetary manipulation, and instead focused almost solely on fiscal stimulus and demand.
mikeyooh7 2 years ago
Although I believe the very NOTION of trying to increase demand in an economy as not only fallacious and impossible without inflation (thereby making it a fallacy) but utterly destructive to human dignity. I really despise demand side economics in general.
Nintendomanwill 2 years ago
Monetarism is an offshoot of Classical/New-Classical economics. So monetarists believe that there would be clearing wages, similar to classical economist theory.
ironchef8000 2 years ago
There is no such a thing as full employment!
What causes unemployment anyway? That should be the centerfold of economic analysis: Real question for real solution instead of abstract pseudo scientific inquiries! What are the mechanism that leads to unemployment, recesssion, depression...etc? That's why I hate both Keynesianism and its cousin Monetarism!
Austrian economics rules the world and has proven so by predicting this crisis while the other ignoramus were looking at their graphs and charts
AFRIKTODAY 2 years ago
Full employment = Natural Rate of Unemployment
Natural Rate of Unemployment is your structurally unemployed and Frictional unemployed.
Dude, go to uni and get a degree
keitaru 2 years ago
Idiot! From which planet did drop from? Show me, in the real world an instance " of full employment"! We are talking about real occurrence buddy, not some pseudo-intellectual fabrication. " What do you mean by Natural rate of unemployment"? In the real world, once again, in a realistic society, there will always be some unemployed people ( Eldery, disabled, sicks, mentally deranged, lazy people, teen, pregnant, women...etc) By the way moron, I have 2 degrees already and getting one more!
AFRIKTODAY 2 years ago
Austrian you mean Hayek sch of thought and thereby embracing free market capitalism . During recession, your LM will be flat as changes in interest rate do not entice investment. Most ppl would hold on to their cash. If this free market idea preceeds then we will be in long term unemployment. Hate keynesian, you shouldn't, knock off money rule you don't. You need different tools for different economic problems. Btw, can't really write every type of unemployment out here cuz I'm limited by words.
keitaru 2 years ago
Hi there
Your videos have really have really helped during by first year Micro class. I am having trouble understanding the Supply and Demand curves. If its not too much trouble, can you do a video on supply and demand shifts etc.
thanks
zhabi094 2 years ago
Thank you for this video, definitely gave me a better visual perspective into both logics.
StreetTactic 2 years ago
this is true however unemployment insurance can be a good thing for the economy n the long run as people have more time to find a job that meets their skill sets. this there is less under-employment. i would rather have an experienced engineer making buildings than working in a textile factory.
rubindr 2 years ago
That's why i base my principals and assumptions on proven facts I.e. Psychology, and Sociology both social sciences. These subjects tell me people are not rational the develop cognitive biases and heuristics, heuristics are "rules of thumb", educated guesses, intuitive judgments or simply common sense. but are not always the optimal choice. people are cognitively lazy and for this reason do not behave like the homo economicous. one constant theme of psychology is human irrationality.
rubindr 2 years ago
Austrian School is a pseudo science. doesn't use math and is untestable. Economics is a social science, it is the study of decision making, praxeological axioms are assumptions not based on any fact.
rubindr 2 years ago 4
Economics is firstly and uniquely a "science of human" choice and decision. Individual subjectivity guide their decision making process. There is no constant in the complicated psychology of people; and two given people put in the same situation will or might always act differently given their own unique appreciation of matter. Try to make economics a mathematical science like physics is plainly stupid. Math and graph can play a role in an historical and statistical analysis; but, not more!
AFRIKTODAY 2 years ago
coordination failure, cost based pricing with lags, delivery lags, implicit contracts with customers, explicit contracts with employees and customers, menu costs( the cost of changing the price of the product) procyclical elasticity of demand, and pricing points (i.e 2.99, 19.99 certain prices have special psychological significance.) this stickiness means that there will be high unemployment until expectations fall or demand increases.
rubindr 2 years ago
The main question is do people have rational expectations or adaptive expectations, if they are rational than a monetarist/ new classical outlook on the world makes sense, however if they are adaptive than people may take long time to change their expectations. Also because prices are sticky in the short run for a whole host of reasons including ...
rubindr 2 years ago
Rubin,
I would argue that people "take long time to change their expectations" because of Unemployment Insurance [U.E]. I would argue this because I am in the position, where I make more on U.E, than I would at a $10hr job. I could pick one up TODAY, but of course I'm not going to rush to the first $10hr job, when I can hold out and try for something better. If your previous salary was over $30k, YOU MAKE MORE THAN $10hr on U.E. Factor in Childcare, and there's an even larger disparity.
HBSchool 2 years ago
well clearly there are more dimensions possible such as expenses, but either way both cut expenses surely, monetarist via lower wages and keynesian via unemployment
selurbrainonebay 2 years ago
Can you do a video on the IS-LM model and liquidity traps thank you
rubindr 2 years ago
i know i was explaining why to afriktoday
rubindr 2 years ago
Comment removed
rubindr 2 years ago
there actually is a subfield called behavioral economics which bases economic theories on psychology and these theories are supportive of the mathematical framework in which we analyze our world. other social sciences use mathematics including psychology, sociology and poly sci, why cant economics
rubindr 2 years ago
look at prospect theory by Kahneman and Tversky
rubindr 2 years ago
economics does use mathematics, a lot of it.
mattymc90 2 years ago
Yes - read "Nudge" by Thaler and Sunstein - very entertaining and thought-provoking in behavioural economics.
pajholden 2 years ago
thanks for the recommendation excellent book
rubindr 2 years ago
chooky is right. i don't know you afriktoday but im going to make an assumption, as we so often do in economics, so here it is, people far more intelligent and far more powerful than you, sat in governments across the world acknowledge keynesian and monetarist policies to be the most effective, so why should anybody listen to a rowdy youtuber? go and release your venom elsewhere and stop ruining a fantastic video. (by the by, thanks phil for these comprehensive and frankly crackin vids)
mattymc90 2 years ago
Well, if everybody thought like you, we would still be living with the canon Law of the catholic church over our head! These were the people who " sat together, brilliant and powerful as you stated, and decided the dogmas of the Christian Church" That's just an example! My point is simple, like Mises stated ( I just red him today again) "Despot and democratic majority are drunk with power... they reject the very notion of economic law." Why do politician support bills? To get reelected!!
AFRIKTODAY 2 years ago
that was super man, simple and easily understandable. much appreciated.
TraniLine 2 years ago
I would have never understood the differences between these two groups if it wasnt for this video
lazoash 2 years ago 7
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crazyman3005 2 years ago
your all douches... oh look at me i have a phd... dope. austrian school... speaks for itself. stop fucking fighting on phils lecture videos... hes a serious man!
mgmtsuckballs 2 years ago
dude, relax..
rephun 2 years ago
can anybody tell me that if MPC=0.8, what would be the effect of a $10 million tax cut and a $ 6 million increase in government purchases?
usaisrealdown 2 years ago
Long live the National Minimum Wage! Let's remember that we are all human beings and that in the real world businesses exploit workers - the NMW ensures a fairer wage for the work you do. Economic theory should be taken with a pinch of salt and a guideline to running an economy - not an absolute! We would all be in a worser situation if the market was left to its own devise.
perkin158 2 years ago
the single best comment on this video. Economic theory should not only be taken with a grain of salt but challenged when it's total rightwing rubbish like monetarism...
jeanpaulfelix 2 years ago
thank you very much Phil !
tahateekhan 2 years ago
Keynes was a socialist to start with. And I find it foolish to try to resolve "unemployment"! Unemployment is a constant in a society and cannot be calculated! Both the Keynesians and monetarists are fools and imbeciles. If really want to LOWER unemployment, cut off the minimum wages clause that prevent entrepreneurs from hiring a new work force! The market has to be open, free without any sorts of socialist intervention.
AFRIKTODAY 2 years ago
Bingo. The minimum wage is nothing but hurtful in the long run.
RealBloppy 2 years ago
Minimum wage prevent the entrance of a cheaper workforce into the workplace; therefore keeping unemployement relatively high. During crisis, it is even more important to get rid of minimum wage or union contract because they hinder the ability of companies to restructure their capital and even keep their employees. One of Ford, GM and Chrysler main problems are due to their Union contracts. Their employees are overpaid comparatively to Toyota's and Honda's. No need for Physics to understand.
AFRIKTODAY 2 years ago
Exactly. Sticky wages in general are horrid for the economy.
RealBloppy 2 years ago
speaking as a monetarist, it is crucial that there always be a minuimum wage, otherwise workers will work for less in an increasingly competitive market driving down living conditions and GDP. Such a free market mechanism would revert people to the informal economy, which is only bad and records prove this often leads to increased crime, its ridiculous to suggest the abolishment of the minimum wage the cons simply far outway the pros in any state of the economy.
92bedfords 2 years ago
It is very simple: People have to be paid accordingly with their skill level. There many people who are willing to enter the workforce but are constricted because of their low skill level than cannot be matched with employers. The minimum wage prevent these people from accessing the work force! And, why not set the minimum wage at $10? What is the logical explanation to set a minimum wage at one level and not at another? Does make sense and is counter productive!
AFRIKTODAY 2 years ago
brilliant! you just summed up an hour and 45 min of class lecture in great detail. thank you once again.
loverofbeats 2 years ago
Keynesians believe the laws of supply and demand are irrelevant...
Ooftyman 2 years ago
This simply isn't true, they meerly disagree with some effects of demand on circumstance, for example keynesians basically feel that people won't be so keen to drop their wages, which logically is a believable thing, in fact the main argument boils down to a factor of time as in a serious slump workers must revise their wage expectations.
92bedfords 2 years ago
And, this is a typical characteristic of neo-keynesians and so called monetarists. They focus one just one random aspect of the economic picture and then generalize their conclusions. The minimum wage is related to over taxation, regulation and fractional reserve banking system and they all form a web that restrict the normal evolution of the market place. Getting rid of all these road blocks will only beneficial to the entire national economy, thus allowing more people to gain work!
AFRIKTODAY 2 years ago
This is true, abolishing the minimum wage will inviegle foreign direct investment and more jobs. But its quite absurd to realisitcly suggest terminating the minimum wage, GDP would plumit, living standards would be equivalent to that of a third world country (working for nothing), people would much rather not work and claim benifits than finding work this way, thus making the situation worse in both the short and long term, hows that for focusing on "one random aspect".
92bedfords 2 years ago
Dude, have you ever red an economics book? What creates jobs? What are the factors that allow a particular social environment to be more productive than another? What is the difference between Japan and France for example? Come on!
Wage are just one aspect of a much more larger body of economics. If you abolish minimum wage but maintain an expensive welfare system, of course there will be dire repercussion. But if abolishing that nonsense goes along lowering taxes...
AFRIKTODAY 2 years ago
lowering taxes, relaxing the regulations and establishing a sound monetary system, there will be no need for "minimum wage", for individual will be able to freely compete for the best paying jobs and entrepreneurs will be able to establish productive business with good pay even for the less educated. You cannot just pick one aspect of the market and explain the aggregate. It is simply illogical! Keynesianism is socialism purely and simply and anti- free market!
AFRIKTODAY 2 years ago
You talk about illogical, and you say the "anti - free market" is illogical...this just isn't true, the correct term for what you are refering is a command economy btw, and having this structure to an economy will do nothing but ensure greater stability, fairer wages and living standards and equal oppertunities for jobs. It is far more sensible than any free market mechanism.
92bedfords 2 years ago
Command economy?? What is that? Where do you draw the line of "command?" Where do you set thee bare of minimum wage? Do the bureaucrat possess an aspect of market knowledge that the owners of businesses and potential entrepreneurs " just don't possess?". Are you implying that the entrepreneurs are just a bunch of greedy profiteers who will set the wage as low as possible in order to maximize their profit margin? Sorry dude! I just do not agree with that logic!
AFRIKTODAY 2 years ago
Of course thats what i'm saying, people go into business for one reason, and like it or not, thats profit. If they can get labour for a cheaper price why would they offer more for the service?? if you are confused by the basic term command economy then i suggest you look it up...
92bedfords 2 years ago
Although free market principles originated in Europe, that subcontinent has been for century now the home of a socialistic mindset that portray the entrepreneur as the ultimate evil and the state as the greatest equalizer. I don't know what the like of Frederic Bastiat, Jevons, and most of father of classical economy will think of your comment:"We need bigger government"! This is Keynesianism at its perfection! Sorry but you are purely and simply a socialist.
AFRIKTODAY 2 years ago
A muscle spasm represent the bursting of a bull market and, the resting period represent a "recession". Recession is the cleaning up of the system and all the malinvestment that occurred during that period of overexcitement! The intrusion of a government 'stabilizing" policy can only worsen and extend the period of readjustment. That's why the USA great depression lasted 15 years while the 1919 crisis lasted only 1 years. Economics is logical and simple to understand; Keynesianism is a fallacy.
AFRIKTODAY 2 years ago
My point is that everyone should be able to benefit to the greatest extent possible from the fruits of his own labor! If someone is engineeous enough to create a business that earn him billions, he should be able to enjoy his invention without some bureaucrat assailing him with taxations because he is rich. Although the USA has been clearly falling into that socialistic mindset, I must admit that europe is far worse! There is no such a thing as mix market economy! Where do you draw a line?
AFRIKTODAY 2 years ago
As for your theories regarding minimum wage, while relaxing regulations and tax's would undisputedly increase investment and therefore jobs. There is still absolute need for a minimum wage, many workers would be taken advantage of for cheap labour, regardless of point of view this just isn't acceptable, its called a negative externality, where the social costs far outway the benifits.
92bedfords 2 years ago
You have to remember the single greatest period of industrial and social development in the USA took place during the second half of the 19th century and there was no "command economy" whatsoever! Unemployment was below 1%! Never before seen in the US or world history! Ever since we have embarked in the so called mix market system, we have actually destroyed our industrial base, expanded the government and increased the welfare recipients! There is no better socialism that free market!
AFRIKTODAY 2 years ago
Can you not see that without a government and the mixed market, when the economy hits a downturn or recession, it will be magnified no end, i dread to think of the effects. If anythink we need bigger government, and more fiscal and monetary power for them. I should say now though i'm not from America.
92bedfords 2 years ago
Entrepreneurship implies taking risk in order to provide a service. It requires hardwork and adjustment to technological and social changes! Most business owners work harder than they employees! Why shouldn't they be rewarded for that effort? Why should a government overtax them because they are supposedly "rich"! This is a mean of hindering the most productive member of the society! You cannot have a mix economy while you have Chineses and asians jumping on the wagon of free market!...
AFRIKTODAY 2 years ago
You also got in wrong on the "magnified issue your stated"! I do not really understand the logic of that term in regard to a recession; the truth is that you do not even understand what a recession is to begin with. When you go to the gymn and workout beyond your strength, you often suffer from muscle spams. You need "a medecine" in a form of rest in order to get back to the gymn again and continue your healthy exercise. This is the same thing in economics!
AFRIKTODAY 2 years ago
omg i can't even be bothered to argue anymore against someone so ignorant, of course the effects of a recession will be amplified or magnified without a government to stabilise the economy. Furthermore i don't no from where you get the knowledge and experience to declare keynesianism fallacy and wrong when so many governments and world leaders follow its policies, its economics at its most logical, i suppose your a right wing monetarist
92bedfords 2 years ago
Talking about ignorance! Remember the concept of Liberalism? Ever heard of of Austrian economics? I would advise you to search into that school of thought instead of presupposing that I am a monetarist. To me, Monetarist are nothing but neo-keynesians and a bunch of socialist regardless of the so called liberal ideas they might support. Keynesianism became popular only because it justified government intervention; just like socialism on a broad spectrum is very much still popular!
AFRIKTODAY 2 years ago
It is a shame that Europe, the birth place of classical liberalism has been overtaken by Keynesianism ( Socialism) to the point where many like you feel at lost when they encounter the principles that were at the foundation of the industrial and social development of Western society around the 18th and 19th century. Ever heard of Jean Baptiste Say, Frederic Bastiat, Stanley Jevon, Anne Robert Jacque Turgot, I can even go as further as Richard cantillon...etc. You really got a lot to learn about!
AFRIKTODAY 2 years ago
You should keep going with your small time and illogical beliefs good look convincing world leaders, decorated economists and professors that keynesianism is this wrong. You paint us as being as extreme as communists, but i'm proud to be a socialist, its fundamentals make sense and government makes this a better world.
92bedfords 2 years ago
A rational person check for the proofs instead of drawing conclusions just for the sake of protecting his beliefs. " Its fundamentals make sense and government make this a better world!"
Dude, are you serious? Have you looked at the world around you? which better world are you talking about? What is the situation of UK nowadays? I guess you are floating into a trade surplus and your society is an example of peaceful egalitarianism. Nonsense dude!
AFRIKTODAY 2 years ago
I know a great Keynesian and his name is "robert Mugabe!" Believe me, everyone is a billionaire in Zimbabwe! Argentina, Iceland and England is the next in line! Have you seen the social inequity around you or do you need glasses? Africa? Asia, south America? They are having it great over there don't they? Isn't the world bank doing a great job advising them? Dude, use your rational ability instead of expecting answer from "great economist". Keynesianism is a fallacy once again and once for all!
AFRIKTODAY 2 years ago
Robert Mugabe isn't really an example of a great keynesian, in fact the policies he implements arn't keynesian at all, you're just trying to associate infamous facists with keynesianism, quite cheap and a desperate argument. Believing in a free market, i can see you have faith in the people, a faith that is no longer justified.
92bedfords 2 years ago
You want to live in a state heaven, move to north Korea or in Cambodia! Sorry but your amateurism is pathetic and I wonder if you even understand the simple principle of Say's Law. As far money is concerned; the blame has to be trust on central banks, who were responsible for making money too easy to banks to loan for consumer to spend. That's it! Unfortunately, because of the fractional reserve banking system, debt is MONEY! A sound money is at the core of Austrian economy!
AFRIKTODAY 2 years ago
And there you go again refering Keynesianism to marxism, you should understand that they are two different groups of economists. Ask yourself why every keynesian hsn't moved to counties like north korea, because as a group essentially they are in favour of more government power, but not total totalitarianism! I think that is your main issue, and wha you must understand.
92bedfords 2 years ago
First, there are more than hundred school of economics thoughts that have grown over the centuries. Post Keynesian fallacies are just the most common nowadays ( Look at the stature of the western nations that have embraced them). True economics is Libertarian economics. Austrian economics. The government has a very little role to play in economy solely because that activity revolve around INDIVIDUAL CONSCIOUS AND RATIONAL ACTIONS. That's it! Government interference can only cause troubles.
AFRIKTODAY 2 years ago
Thats crap and sureley you realise it, no one can be that ignorant, "government interference only causes trouble", you really are on your own there...where would we be without fiscal and monetary policies to boost the economy and standard of living, where would we be without education and health stimuli!
92bedfords 2 years ago
Man oh man are you ignorant!! Tell me an example of "fiscal and monetary policy" that has ever boosted A NATION ECONOMY? PLease I beg you to show me JUST ONE EXAMPLE!!I guess you love paying your taxes TO THE QUEEN SO THAT SHE CAN MAINTAIN HER HIGH LIVING STANDARD! I wouldn't give a penny to God himself! It is my MONEY, I have earned it! Education and health stimuli? The free market can take care of that! Best schools: Public or privates? Getting the gov out of the way will lower the costs!
AFRIKTODAY 2 years ago
Also, Fractional reserve banking system is a the cause of inflation and social inequities that are so prevalent around the world nowadays. The super rich, backed by the power hungry government are working to maintain their influence over the majority of people who are struggling to get by. Most countries around the world are witnessing an increase in living standard relatively with wages. That's inflation. I wouldn't even ask you the cost of a cup of coffee in LONDON!
AFRIKTODAY 2 years ago
Also, Mugabe is a damn Keynesian to the core. What did he try to do when his country got in trouble? He printed more money!! That's the solution proposed by most government around the world!! Dude, you have no understanding whatsoever of ECONOMICS! Human action are at the center of the economic process, not government policies! The role, the basic role of the government is to maintain and protect the rights of individuals and protect a nation in case of aggression! That's it!
AFRIKTODAY 2 years ago
The last time I checked the pound had lost a lot of its value, there are a lot of social strifes and a rebirth of "Nationalism"; your welfare society is taking its toll over the productive members of the society who are leaving your country for less taxing countries. Your education system is one of the most expensive in the world, you have no industrial basis, you public debt is huge and your government is carrying a deficit...etc That's keynesianism my friend! Better world? Kidding right!
AFRIKTODAY 2 years ago
There's no use drawing proofs, you just blindly refute them. I'm quite serious about my comment yes, for god sake if it wasn't for governments bailing us out then we would have no economy. Your quite keen to blame government for all this, but all you have to do is look at the causes of this recession...The banks, private sector businesses headed by selfish entrepreneurs and greedy shareholders getting profits at any and all costs. Thats common sense and fact.
92bedfords 2 years ago
Sorry but your outlook is extremely flawed to begin with. You have not understanding whatsoever of monetary policy and your claims are simply and pathetically out of Karl Marx "das capital"! Since you do not live in North Korea, I will argue that you are permitted to write your nonsensical pseudo-economics comments on the internet because "someone in private sector" is providing you that service. The shoes you are wearing, the cab, bus, food,...etc That's from the private sector!
AFRIKTODAY 2 years ago
Thankyou for reminding me where i purchase my goods, and OMG no western country is going to print more money, and i dont know where you've heard thats keynesian policy, but i'm afraid its just not i can very much asure you of that, so don't say i've no understanding when clearly you need to go off and do a little more research into government policies you fucking idiot.
92bedfords 2 years ago
Well fuckhead, I was answering on your skepticism about "people" I guess it is the government that his providing you with the daily means of life! That was my point! Government policies? Are you out of your head? Which government? What about individual policies? What is a Keynesian policy? I mean, what is Keynesianism? Maybe I am socialist and you are a free market Libertarian?Educate my ignorance please!
AFRIKTODAY 2 years ago
i'm refering to government policy on printing more money to combat economic downturns, and it is wideley recognised by all knowledgable people that printing more money is the last resort of a desperate country such as zimbabwe. And when i say policies i mean solutions to different problems or causes to different problems.
92bedfords 2 years ago
What is the difference between Mugabe printings and the bank of England printings and bailouts? It is ALL PRINTING! The only difference is that THERE IS NO LEGITIMATE TRUST AND CONFIDENCE in Zimbabwe economy comparatively with relatively and historically stable nation in Europe. But the result are the same? Inflation; hyper inflation in Zimbabwe of course! Printing money is not A SOLUTION, it is a DESTRUCTION OF AN ECONOMY regardless of how and where it is OPERATED!
AFRIKTODAY 2 years ago