A Quote by George Akerlof
In New Classical theory, periods of declining employment - business cycle downturns - may be caused by an unexpected decline in aggregate demand, which leaves workers mistakenly holding out for nominal wages that exceed the new market-clearing level.
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Unemployment is 'involuntary' when the price is above its market clearing level. Workers are unemployed because jobs are not available at the prevailing wages, period. The only recourse is to either expand the number of jobs or somehow lower the wage.
Writing ought either to be the manufacture of stories for which there is a market demand - a business as safe and commendable as making soap or breakfast foods - or it should be an art, which is always a search for something for which there is no market demand, something new and untried, where the values are intrinsic and have nothing to do with standardized values.
In my Inaugural I laid down the simple proposition that nobody is going to starve in this country. It seems to me to be equally plain that no business which depends for existence on paying less than living wages to its workers has any right to continue in this country. By "business" I mean the whole of commerce as well as the whole of industry; by workers I mean all workers, the white collar class as well as the men in overalls; and by living wages I mean more than a bare subsistence level - I mean the wages of decent living.
If we are to have a stabilized market demand, selling pressure should be maintained . . . perhaps increased . . .at the first sign of a decline in business. I know of no single way business managers can do more to stabilize market demand than through greater stabilization of sales and advertising expenditures.
The U. S. is headed toward a period of business depression... beginning within the next two years, which may exceed that which preceded the War. ... The only thing that will save us is a new gold policy or the discovery of a new process or additional gold fields. If the fall [of gold production] is not prevented by design or accident we shall throttle business, wringing out all profits and experiencing all the evils of deflation.
Apparently, union bosses are so distraught about declining enrollments they will stoop to exploiting illegal workers. There is no doubt that this would hurt American workers, who would suddenly face a flooded job market full of cheap foreign labor. It would depress the wages of the American workers and cost them jobs.
No business which depends for existence on paying less than living wages to its workers has any right to continue in this country... By living wages I mean more than a bare subsistence level - I mean the wages of decent living.
Prophetic utterance, like poetic utterance, transforms experience and moves the receiver to new attitudes. The kinds of experience--the recognitions or revelations--out of which both prophecy and poetry emerge, are such as to stir the prophet or poet to speech that may exceed their own known capacities; they are "inspired," they breathe in revelation and breathe out new words; and by so doing they transfer over to the listener or reader a parallel experience, a parallel intensity, which impels that person into new attitudes and new actions.
Some periods of our growth are so confusing that we don't even recognize that growth is happening...Those long periods when something inside ourselves seems to be waiting, holding its breath, unsure about what the next step should be, eventually become the periods we wait for, for it is in those periods that we realize that we are being prepared for the next phase of our life and that, in all probability, a new level of the personality is about to be revealed.
The theory of the determination of wages in a free market is simply a special case of the general theory of value. Wages are the price of labour.
Workers and their families may starve to death in the New World Order of economic rationality, but diamond necklaces are cheaper in elegant New York shops, thanks to the miracle of the market.
Disciples of Keynes, who focus on aggregate demand, view any increase in household wealth as raising employment because they say it adds to consumer demand.
One reason why upturns follow downturns is that downturns tend to overshoot. People get panicky, they're afraid to stay the course, so they start selling. The other thing is that I think, as entrepreneurs keep on waiting to produce new things, that there's an accumulation of as-yet-unexploited new ideas that keeps mounting up.
One area in which we can be certain mass immigration has an effect is housing. More than one third of all new housing demand in Britain is caused by immigration. And there is evidence that without the demand caused by mass immigration, house prices could be 10% lower over a 20-year period.
Deflation means a slowdown of income growth. Markets shrink, new capital investment and employment also taper off, so wages decline. That is what's happening as deliberate policy in Europe and the United States. Falling or stagnant prices are simply the result of having less income to spend.
Here's why I think the public service jobs are almost unavoidable: When we have downturns in the economy - and we will, for we haven't repealed the business cycle - unemployment will build, yet we no longer have any safety net. What are we going to do? Unless we decide to pull out all the stops and lower interest rates immediately and risk turning a recession into wild inflation, we're going to have to figure out some way of providing some more, not job security, but employment security.
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