abu yahya's definitions
*noun*; prolonged economic crisis characterized by drastic (i.e., >20%) decline in output, reduction in employment, and deflation. Other technical conditions include a liquidity trap and "permanent" (i.e., persisting in many sectors for several quarters) failure to reach equilibrium.
Usually the word "depression" (when referring to economics) is used to refer to the Great Depression, although in fact there were eight incidents of a global depression between 1815 and 1922. These were
--- 1815-21
--- 1832-33
--- 1837-44
--- 1854-57
--- 1867-68
--- 1876-79
--- 1893-96
--- 1920-22
In addition, there have been many localized depressions, panics (e.g., the 1907 Panic {USA}, followed by the Mexican Depression of 1908), and recessions.
DIFFERENCE BETWEEN RECESSION & DEPRESSION
The technical distinction between a recession and depression can vary, although economists usually agree on which is which. In Keynesian economics, a depression is defined by the existence of a flat liquidity-money (LM) curve (which means that interest rates have no influence on people's determination to hold their wealth as cash); and/or a nearly vertical investment-savings (IS) curve (which means interest rates have no influence on the willingness of entrepreneurs to expand/continue operations).
In contrast, a recession is a much less drastic event. Interest rates still have influence on investment and liquidity, and there is no deflation. Conventional fiscal policy and monetary policy, combined and in moderate doses, can restore full employment.
Neoclassical economics/New Classical economics defines a recession as a shift in people's income/leisure preferences as the result of a technology shock. The technology shock sharply reduces the returns to labor, so workers are paid less and many withdraw their labor from the market. In a depression, the technology shocks are compounded and cause a permanent change in the production function; large numbers of enterprise are no longer viable.
More generally, a recession involves the downward phase of a routine business cycle; these typically occur every three-seven years. A depression represents a partial collapse of the industrial system, and a comprehensive collapse of the financial system.
Usually the word "depression" (when referring to economics) is used to refer to the Great Depression, although in fact there were eight incidents of a global depression between 1815 and 1922. These were
--- 1815-21
--- 1832-33
--- 1837-44
--- 1854-57
--- 1867-68
--- 1876-79
--- 1893-96
--- 1920-22
In addition, there have been many localized depressions, panics (e.g., the 1907 Panic {USA}, followed by the Mexican Depression of 1908), and recessions.
DIFFERENCE BETWEEN RECESSION & DEPRESSION
The technical distinction between a recession and depression can vary, although economists usually agree on which is which. In Keynesian economics, a depression is defined by the existence of a flat liquidity-money (LM) curve (which means that interest rates have no influence on people's determination to hold their wealth as cash); and/or a nearly vertical investment-savings (IS) curve (which means interest rates have no influence on the willingness of entrepreneurs to expand/continue operations).
In contrast, a recession is a much less drastic event. Interest rates still have influence on investment and liquidity, and there is no deflation. Conventional fiscal policy and monetary policy, combined and in moderate doses, can restore full employment.
Neoclassical economics/New Classical economics defines a recession as a shift in people's income/leisure preferences as the result of a technology shock. The technology shock sharply reduces the returns to labor, so workers are paid less and many withdraw their labor from the market. In a depression, the technology shocks are compounded and cause a permanent change in the production function; large numbers of enterprise are no longer viable.
More generally, a recession involves the downward phase of a routine business cycle; these typically occur every three-seven years. A depression represents a partial collapse of the industrial system, and a comprehensive collapse of the financial system.
From 1929 to 1933 the U.S. price level fell 25 percent. Many economists blame this deflation for the severity of the Great Depression. They argue that the deflation may have turned what in 1931 was a typical economic downturn into an unprecedented *sic* period of high unemployment and depressed income.
N. Gregory Mankiw, William M. Scarth, *Macroeconomics: Canadian Edition*, 2nd ed. (2003) p.318
N. Gregory Mankiw, William M. Scarth, *Macroeconomics: Canadian Edition*, 2nd ed. (2003) p.318
by Abu Yahya March 7, 2009
Get the depression mug.Capital investment in a foreign country that takes the form of purchases of securities (stocks, bonds, and commercial paper) in the companies of firms based in that country. Contrast to FDI.
by abu yahya September 28, 2008
Get the portfolio investment mug.(ECONOMICS) international bank created after World War 2 to coordinate currency stabilization. Main policy tool consists of lending money to central bank of countries facing a liquidity crisis.
In some cases, as when a member government is insolvent, the IMF will impose a structural adjustment program (SAP) requiring the government to jettison programs it has to serve the poor. For this reason, the IMF is often harshly criticized.
In some cases, as when a member government is insolvent, the IMF will impose a structural adjustment program (SAP) requiring the government to jettison programs it has to serve the poor. For this reason, the IMF is often harshly criticized.
It is often said that the International Monetary Fund makes economic crises worse by imposing the same austerity program everywhere, thereby further reducing a member state's ability to pay its sovereign debt.
(Another way of putting this is that the IMF's policies are pro-cyclical
(Another way of putting this is that the IMF's policies are pro-cyclical
by Abu Yahya May 5, 2010
Get the International Monetary Fund mug.a graph correlating inflation against unemployment rates. Using a horizontal axis to represent unemployment, and a vertical axis to represent inflation, A.W. Phillips found the rate of inflation and unemployment in Great Britain for every year between 1861 and 1957. When he had plotted the 97 dots on the chart, he had a rather neat hyperbola convex to the origin of the graph.
In other words, if the rate of unemployment was low, the rate of inflation was high, and vice versa. At the time, economists concluded that this was a logical outcome of both being influenced by the rate of interest: if interest rates were low, then unemployment would be low and prices would rise, but if interest rates were high then there would be lots of unemployment and workers would not have much money to spend... so prices would go down.
Unfortunately, when economists tried to design policy around this concept they disrupted the smooth relationship. In the years since the 1960's, there has not been a straightforward relationship, and Keynesian economics has had to be drastically revised to a post-Phillips Curve regime.
There is some correlation between inflation and unemployment, but the correlation is much more complicated than originally thought. It is quite possible to have high unemployment and high inflation (i.e., a high "misery index").
In other words, if the rate of unemployment was low, the rate of inflation was high, and vice versa. At the time, economists concluded that this was a logical outcome of both being influenced by the rate of interest: if interest rates were low, then unemployment would be low and prices would rise, but if interest rates were high then there would be lots of unemployment and workers would not have much money to spend... so prices would go down.
Unfortunately, when economists tried to design policy around this concept they disrupted the smooth relationship. In the years since the 1960's, there has not been a straightforward relationship, and Keynesian economics has had to be drastically revised to a post-Phillips Curve regime.
There is some correlation between inflation and unemployment, but the correlation is much more complicated than originally thought. It is quite possible to have high unemployment and high inflation (i.e., a high "misery index").
The Phillips Curve implies a trade-off between unemployment and inflation. Unfortunately, this trade-off may sometimes represent more of a Faustian bargain.
by Abu Yahya February 14, 2009
Get the Phillips Curve mug.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 libel mug.Bill passed into law May 1908. Created a scheme for preventing banking liquidity crises (such as the Crisis of 1907); also created a commission for massive banking reform. The Aldrich-Vreeland Commission deliberated for three years before sending their plan to Congress.
In 1912, Republicans lost control of Congress and the White House. The Aldrich-Vreeland was modified by Sen. Carter Glass (D-VA), then submitted it to Congress and passed December 1913. This created the Federal Reserve System.
Sen. Glass argued that the Federal Reserve Act of 1913 was totally different from the plan developed by the Republicans. Anna Schwartz and Milton Friedman, in *A Monetary History of the United States, 1867-1960* (1963) explained it was pretty much the same. In any event, the Aldrich-Vreeland Act was one of the most important pieces of legislation ever passed in response to an economic crisis.
In 1912, Republicans lost control of Congress and the White House. The Aldrich-Vreeland was modified by Sen. Carter Glass (D-VA), then submitted it to Congress and passed December 1913. This created the Federal Reserve System.
Sen. Glass argued that the Federal Reserve Act of 1913 was totally different from the plan developed by the Republicans. Anna Schwartz and Milton Friedman, in *A Monetary History of the United States, 1867-1960* (1963) explained it was pretty much the same. In any event, the Aldrich-Vreeland Act was one of the most important pieces of legislation ever passed in response to an economic crisis.
MARC: Wow! Glenn Beck says that Woodrow Wilson was actually a crypto-communist.
BILL: Sorry, that's silly.
MARC: Well, didn't he create the Federal Reserve Bank? That's socialistic, isn't it.
BILL: Uh, it was designed during the Administration of William Howard Taft, Marc. Ever heard of the Aldrich–Vreeland Act?
MARC: President Taft? I had no idea he was a Communist too!
BILL: Sorry, that's silly.
MARC: Well, didn't he create the Federal Reserve Bank? That's socialistic, isn't it.
BILL: Uh, it was designed during the Administration of William Howard Taft, Marc. Ever heard of the Aldrich–Vreeland Act?
MARC: President Taft? I had no idea he was a Communist too!
by Abu Yahya April 5, 2010
Get the Aldrich–Vreeland Act mug.Largest oil company in the world (as of 2010; in 2009, it was #2). Sales in 2009 were $285 billion. Worldwide proved reserves of 14.1 billion barrels of oil equivalent. Most of the oil giant's crude is produced in Nigeria, Oman, the UK, and the USA. Shell is also investing heavily in the Athabasca Oil Sands Project, which converts oil sands in Alberta to synthetic crude oil. The company operates 44,000 gas stations (the world's largest retail fuel network) in more than 80 countries.
Shell is implicated in exploitation and support for dictatorships in Nigeria, Angola, and elsewhere. It operates a huge, stunningly toxic facility in the Niger River Delta, but provides almost no compensation to the Ogoni people. In 1994, Ogoni activist Ken Saro-Wiwa was arrested for allegedly inciting violence against Shell staff and executed, along with 8 other Ogoni.
Shell is implicated in exploitation and support for dictatorships in Nigeria, Angola, and elsewhere. It operates a huge, stunningly toxic facility in the Niger River Delta, but provides almost no compensation to the Ogoni people. In 1994, Ogoni activist Ken Saro-Wiwa was arrested for allegedly inciting violence against Shell staff and executed, along with 8 other Ogoni.
Royal Dutch Shell is, like BP, p.l.c. and Exxon Mobil, very large, very old, and very evil. It is based in the Hague--ironically enough, near the International Court of Justice.
by Abu Yahya July 18, 2010
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