abu yahya's definitions
*noun*; a school of economic thought prevalent after World War 2; around 1980, Keynesianism was supposedly superseded by monetarism, and then by the rational expectations hypothesis. Theory is named for John M. Keynes (1881-1946), who argued against the then-mainstream view that the economy was "self correcting." Keynes' book introducing his economic theory was The General Theory of Employment, Interest, and Money (1936).
*Basic Concept*
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The basic concept of Keynesianism is that each economy has a level of aggregate demand, which does not respond to price or income levels in the same way that classical economics says it should. Rising income, for example, *does not* lead to a matching increase in consumption or business investment. Business investment is driven by investment opportunity, not {only by interest rates. Savings is driven by liquidity preference, not only by interest rates.
Keynes suggested that, for any economy, there was a marginal propensity to consume that was less than one. Hence, if the national income rose by 10%, consumption would rise by something less than 10%. This would lead to some production not being consumed, waste, and unemployment.
*What Keynesianism Says We Should Do*
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In 1936, when Keynes wrote *The General Theory*, most of the world was suffering from the Great Depression. Keynes recommended that the national government stimulation aggregate demand through a policy of deficit stimulus. In other words, the country should create adequate levels of aggregate demand by spending more than it took in as taxes (fiscal policy).
Also, Keynesianism held that aggregate demand could be stimulated *up to a point* by lowering interest rates (monetary policy).
*Application*
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In the USA and other large industrial countries, fiscal and monetary policy has been attempted often. After 1980, the Federal Reserve chair (Paul Volcker) was a monetarist, who claimed to reject Keynesianism. Nobel laureates in economics almost unanimously attacked Keynesianism as outmoded and wrong-headed, but governments continue to use fiscal stimulus and interest rate cuts in response to recessions.
*Basic Concept*
_______________________________________
The basic concept of Keynesianism is that each economy has a level of aggregate demand, which does not respond to price or income levels in the same way that classical economics says it should. Rising income, for example, *does not* lead to a matching increase in consumption or business investment. Business investment is driven by investment opportunity, not {only by interest rates. Savings is driven by liquidity preference, not only by interest rates.
Keynes suggested that, for any economy, there was a marginal propensity to consume that was less than one. Hence, if the national income rose by 10%, consumption would rise by something less than 10%. This would lead to some production not being consumed, waste, and unemployment.
*What Keynesianism Says We Should Do*
_______________________________________
In 1936, when Keynes wrote *The General Theory*, most of the world was suffering from the Great Depression. Keynes recommended that the national government stimulation aggregate demand through a policy of deficit stimulus. In other words, the country should create adequate levels of aggregate demand by spending more than it took in as taxes (fiscal policy).
Also, Keynesianism held that aggregate demand could be stimulated *up to a point* by lowering interest rates (monetary policy).
*Application*
_______________________________________
In the USA and other large industrial countries, fiscal and monetary policy has been attempted often. After 1980, the Federal Reserve chair (Paul Volcker) was a monetarist, who claimed to reject Keynesianism. Nobel laureates in economics almost unanimously attacked Keynesianism as outmoded and wrong-headed, but governments continue to use fiscal stimulus and interest rate cuts in response to recessions.
Keynesianism held out the prospect that the state could reconcile the private ownership of the means of production with democratic management of the economy.
Adam Przeworski, *Capitalism and social democracy* (1986)
Adam Przeworski, *Capitalism and social democracy* (1986)
by Abu Yahya March 3, 2009
Get the Keynesianismmug. Act passed in 1933 which regulated banking. Named for Sen. Carter Glass (D-VA) and Rep. Henry Steagall (D-AL 3rd). Also known as the Banking Act of 1933. Motivated by the Great Depression and one of the pillars of the New Deal.
Glass-Steagall prohibited commercial banks from engaging in underwriting securities, i.e., banks that accepted deposits and loaned money at interest were not allowed to issue bonds or new public offerings of stocks. The Act also authorized the creation of deposit insurance.
The Banking Act of '33 was strengthened in 1956 when bank holding companies were barred from the insurance business.
Between 1982 and 1999, banks were deregulated until the same corporation could take deposits, create credit, borrow from the Federal Reserve, underwrite stocks and bonds, operate a hedge fund, and sell insurance.
Glass-Steagall prohibited commercial banks from engaging in underwriting securities, i.e., banks that accepted deposits and loaned money at interest were not allowed to issue bonds or new public offerings of stocks. The Act also authorized the creation of deposit insurance.
The Banking Act of '33 was strengthened in 1956 when bank holding companies were barred from the insurance business.
Between 1982 and 1999, banks were deregulated until the same corporation could take deposits, create credit, borrow from the Federal Reserve, underwrite stocks and bonds, operate a hedge fund, and sell insurance.
Glass-Steagall was repealed in stages between 1982 and 1999.
In 1990, the largest bank in the USA--CitiBank--held assets of $369.1 (2009 dollars); by 2009, it held over 5x that. Bank of America is now 13.24 times its size in 1990. The repeal of Glass-Steagall undeniably worsened our problem with banks that were too big to fail.
In 1990, the largest bank in the USA--CitiBank--held assets of $369.1 (2009 dollars); by 2009, it held over 5x that. Bank of America is now 13.24 times its size in 1990. The repeal of Glass-Steagall undeniably worsened our problem with banks that were too big to fail.
by Abu Yahya April 5, 2010
Get the Glass-Steagallmug. (ECONOMICS) the annual increase in financial claims owed to the people of particular country, MINUS any increase of claims that same people owe abroad. The net annual increase in assets resulting from commerce with the rest of the world.
COMPONENTS
There are three components of current accounts:
(1) trade balance (surplus or deficit)
(2) foreign factor income (income minus outgo)
(3) net foreign aid
Usually the largest component of a current account surplus is the trade surplus, although in 1990 the USA actually had a quarterly current account surplus caused by massive "foreign aid" (actually, payments to defray the cost of waging the first Gulf War.
COMPONENTS
There are three components of current accounts:
(1) trade balance (surplus or deficit)
(2) foreign factor income (income minus outgo)
(3) net foreign aid
Usually the largest component of a current account surplus is the trade surplus, although in 1990 the USA actually had a quarterly current account surplus caused by massive "foreign aid" (actually, payments to defray the cost of waging the first Gulf War.
The South Korean won was lower late Tuesday as investor appetite for risk{y} assets was damped by broad-based losses in regional stock markets, led by a sharp fall in Chinese shares.
The local currency largely brushed off news that the country's current account surplus rose in May to a six-month high of $3.83 billion.
Traders said any positive impact from the current account data was offset by data showing the capital account balance... posted a net outflow of $11.96 billion in May, compared with a $8.56 billion inflow in April.
The local currency largely brushed off news that the country's current account surplus rose in May to a six-month high of $3.83 billion.
Traders said any positive impact from the current account data was offset by data showing the capital account balance... posted a net outflow of $11.96 billion in May, compared with a $8.56 billion inflow in April.
by Abu Yahya July 4, 2010
Get the current account surplusmug. a false allegation of murder; the term refers specifically to a recurring rumor from 12th century Europe that Jews were kidnapping Christian children and using their blood for ritual purposes. A famous example of the blood libel is recounted in the "Nun Prioress's Tale" from Chaucer's *Canterbury Tales*. In this and other versions of the story, the events are absurd and feature perverse miracles.
Frequently occurrences of the blood libel were accompanied by a wave of mass murder of Jewish residents of the city. In many cases, the zealots would force the authorities to try random Jews for the alleged crime; these trials were, naturally, travesties.
The last case of a blood libel resulting in murder was the Kielce pogrom of 1946. 200 Jewish survivors of the Final Solution were being transported back to Poland when a boy (who had disappeared for a couple of days) told the police he had been kidnapped by Jews. The police went to a hostel where returning Holocaust survivors were staying, and massacred 37 of them.
Sometimes the phrase "blood libel" is used to refer to similar allegations against primarily non-Jewish groups; for example, many nationalities have been accused of kidnapping children to harvest their organs and sell them to rich patients in the developed world.
Frequently occurrences of the blood libel were accompanied by a wave of mass murder of Jewish residents of the city. In many cases, the zealots would force the authorities to try random Jews for the alleged crime; these trials were, naturally, travesties.
The last case of a blood libel resulting in murder was the Kielce pogrom of 1946. 200 Jewish survivors of the Final Solution were being transported back to Poland when a boy (who had disappeared for a couple of days) told the police he had been kidnapped by Jews. The police went to a hostel where returning Holocaust survivors were staying, and massacred 37 of them.
Sometimes the phrase "blood libel" is used to refer to similar allegations against primarily non-Jewish groups; for example, many nationalities have been accused of kidnapping children to harvest their organs and sell them to rich patients in the developed world.
Although the details have changed over the last millenium, the blood libel retains core elements of sadistic fantasy, psychological projection, and crass opportunism.
by Abu Yahya February 15, 2009
Get the blood libelmug. (FINANCE) a type of financial derivative which two parties "swap," or exchange, the streams of income (or payments) from two different sources. The actual instrument is created by a third party, such as an investment bank.
The most familiar version of the swap is the interest rate swap, in which the holder of a fixed rate loan and the holder of an adjustable rate loan agree to exchange revenue streams.
The variety of swaps available is massively greater than with options or futures; essentially, swaps exist for every arbitrage opportunity that any combination of markets provides; the market for swaps is huge.
The most familiar version of the swap is the interest rate swap, in which the holder of a fixed rate loan and the holder of an adjustable rate loan agree to exchange revenue streams.
The variety of swaps available is massively greater than with options or futures; essentially, swaps exist for every arbitrage opportunity that any combination of markets provides; the market for swaps is huge.
BILL: Why do firms buy swaps? Why don't they just sell the loans they have to other banks, or whatever?
ANNA: One is that swaps are a method of hedging risk; you hold the bond in case the price goes up, but you buy interest rate swaps to protect against having average rates in your portfolio that are two high or two low.
ANNA: One is that swaps are a method of hedging risk; you hold the bond in case the price goes up, but you buy interest rate swaps to protect against having average rates in your portfolio that are two high or two low.
by Abu Yahya April 5, 2010
Get the swapmug. (IRANIAN HISTORY) Secret police of Iran during the reign of Shah Muhammad Reza (r.1941-1979); began operations in 1957, four years after Operation Ajax. Gen. Herbert Norman Schwarzkopf (father of Gen. Norman Schwarzkopf was a US Army liaison who trained SAVAK in intelligence tactics; additional training was provided by the Israeli military.
General Teymur Bakhtia, the main Iranian military officer involved in Operation Ajax, was rewarded with command of SAVAK; he was dismissed in 1961 because he was believed to be organizing a coup. Subsequently, the Shah had his own secret service to spy on the secret service.
SAVAK's activities to include gathering intelligence and neutralizing the regime's opponents. An elaborate system was created to monitor all facets of political life. For example, a censorship office was established to monitor journalists, literary figures, and academics throughout the country; it took appropriate measures against those who fell out of line. Universities, labor unions, and peasant organizations, among others, were all subjected to intense surveillance by SAVAK agents and paid informants. The agency was also active abroad, especially in monitoring Iranian students who publicly opposed Pahlavi rule.
General Teymur Bakhtia, the main Iranian military officer involved in Operation Ajax, was rewarded with command of SAVAK; he was dismissed in 1961 because he was believed to be organizing a coup. Subsequently, the Shah had his own secret service to spy on the secret service.
SAVAK's activities to include gathering intelligence and neutralizing the regime's opponents. An elaborate system was created to monitor all facets of political life. For example, a censorship office was established to monitor journalists, literary figures, and academics throughout the country; it took appropriate measures against those who fell out of line. Universities, labor unions, and peasant organizations, among others, were all subjected to intense surveillance by SAVAK agents and paid informants. The agency was also active abroad, especially in monitoring Iranian students who publicly opposed Pahlavi rule.
SAVAK mostly concentrated on Tudeh and populist organizations until the late 1960's, since the clergy was mostly aligned with the monarchy until 1964, when the regime started to redistribute endowments of land held by the religious orders.
by Abu Yahya July 19, 2010
Get the SAVAKmug. a{n alleged} miracle that serves no purpose or is actively evil. For example, in the Apocryphal New Testament, in the book *Protevangelion*, XI. Mary's immaculate conception has caused immense turmoil for Joseph and Mary, not merely because Joseph assumes Mary has conceived with another mortal, but also because she does so far too soon. This is therefore resolved by more miracles, that fail to convince anyone (xi.19). In XIII., Joseph has to get a midwife, and finds that time has stopped (so he can find her quickly?). But in the following chapter, the midwife is useless and Mary delivers miraculously too. So there was no point at all to the miracle.
Other examples: a story in the Talmud of a slain holy man's blood, which bubbled miraculously on the spot where he was killed. Nebuchadnezzar is said to arrive there after his conquest of Jerusalem and demand to know why the blood bubbles. When he finds out, he believes he has to appease the spirit of the holy man and so he "sacrifices" 80,000 people on the spot where the blood bubbles. Wouldn't God stop the bubbling just to get Nebuchadnezzar to stop murdering people there?
Other examples: a story in the Talmud of a slain holy man's blood, which bubbled miraculously on the spot where he was killed. Nebuchadnezzar is said to arrive there after his conquest of Jerusalem and demand to know why the blood bubbles. When he finds out, he believes he has to appease the spirit of the holy man and so he "sacrifices" 80,000 people on the spot where the blood bubbles. Wouldn't God stop the bubbling just to get Nebuchadnezzar to stop murdering people there?
If Bush was a perverse miracle sent from God to punish our nation for its wickedness, then would it not have been more godlike to make us less wicked--instead?
by Abu Yahya February 15, 2009
Get the perverse miraclemug.