Abu Yahya's definitions
in economics, the net income from assets that are owned by foreigners. The citizens of a country will own assets that are physically located overseas (for example, real estate in another country, shares of foreign stock, or even labor performed while an expatriate), and those assets earn income. At the same time, foreigners likewise earn income on assets located in ones' own country.
If domestically-owned assets located abroad earn more income than domestic assets owned by foreigners, then there will be a net flow of income from overseas. This is a collateral benefit to running a trade surplus, especially over several years.
An example might be the United Kingdom (UK) during the 19th century. Prior to the 1880's, the UK exported far more than it imported. With the foreign money, it bought assets in the economies of other countries, such as the USA, Continental Europe, and the future Commonwealth of Nations. These assets naturally earned a lot of income, as they accumulated over many decades. The income from these assets was so large that, after the 1880's, the UK ran a trade deficit but still had a current account surplus.
In the case of the UK, the current account surplus from the NFFI was still large enough that the UK could continue to buy foreign assets that earned income, even as its trade deficit grew during the early 20th century.
If domestically-owned assets located abroad earn more income than domestic assets owned by foreigners, then there will be a net flow of income from overseas. This is a collateral benefit to running a trade surplus, especially over several years.
An example might be the United Kingdom (UK) during the 19th century. Prior to the 1880's, the UK exported far more than it imported. With the foreign money, it bought assets in the economies of other countries, such as the USA, Continental Europe, and the future Commonwealth of Nations. These assets naturally earned a lot of income, as they accumulated over many decades. The income from these assets was so large that, after the 1880's, the UK ran a trade deficit but still had a current account surplus.
In the case of the UK, the current account surplus from the NFFI was still large enough that the UK could continue to buy foreign assets that earned income, even as its trade deficit grew during the early 20th century.
by Abu Yahya February 14, 2009
Get the foreign factor incomemug. *noun*; series of programs enacted by the administration of Franklin D. Roosevelt (1933-1945) in response to the Great Depression. This definition refers to the New Deal in US history (as opposed to the current "New Deal" in Great Britain).
The main architects of the New Deal were Harry Hopkins, Henry A. Wallace, and Harold L. Ickes. The chief prigrams were:
--- The Works Progress Administration (WPA);
--- the Public Works Administration (PWA);
--- the Agricultural Adjustment Administration (AAA).
These were set up to address industrial and farming failures.
Other programs addressed a long-standing need:
--- the Civilian Conservation Corps (CCC);
--- the Tennessee Valley Authority (TVA), which introduced electrical power infrastructure to much of the impoverished rural South;
--- the Civil Works Administration (CWA), which supplied electrical power generation;
--- the Federal Depository Insurance Corporation (FDIC), which provides insurance for bank accounts;
--- the Securities Exchange Commission (SEC);
--- the Social Security Administration (SSA);
Legislation included:
--- the National Labor Relations Act (NLRA), or Wagner Act, which gave most workers the right to organize;
--- the National Industrial Recovery Act (NIRA), which was struck down in 1935 by the US Supreme Court;
--- the Fair Labor Standards Act (FLSA), which set basic working standards.
The New Deal's main impact was to establish basic protections for workers, consumers, and farmers. While some of these protections could have been better designed, they perform an indispensable function. In terms of actual fiscal policy, the New Deal was far too small to hasten the end of the Great Depression itself.
The main architects of the New Deal were Harry Hopkins, Henry A. Wallace, and Harold L. Ickes. The chief prigrams were:
--- The Works Progress Administration (WPA);
--- the Public Works Administration (PWA);
--- the Agricultural Adjustment Administration (AAA).
These were set up to address industrial and farming failures.
Other programs addressed a long-standing need:
--- the Civilian Conservation Corps (CCC);
--- the Tennessee Valley Authority (TVA), which introduced electrical power infrastructure to much of the impoverished rural South;
--- the Civil Works Administration (CWA), which supplied electrical power generation;
--- the Federal Depository Insurance Corporation (FDIC), which provides insurance for bank accounts;
--- the Securities Exchange Commission (SEC);
--- the Social Security Administration (SSA);
Legislation included:
--- the National Labor Relations Act (NLRA), or Wagner Act, which gave most workers the right to organize;
--- the National Industrial Recovery Act (NIRA), which was struck down in 1935 by the US Supreme Court;
--- the Fair Labor Standards Act (FLSA), which set basic working standards.
The New Deal's main impact was to establish basic protections for workers, consumers, and farmers. While some of these protections could have been better designed, they perform an indispensable function. In terms of actual fiscal policy, the New Deal was far too small to hasten the end of the Great Depression itself.
by Abu Yahya March 6, 2009
Get the New Dealmug. (ECONOMICS) Total unemployed plus discouraged workers, as a percent of the civilian labor force plus discouraged workers.
The US Bureau of Labor Statistics regularly publishes six estimates of unemployment. The others are U-1, U-2, U-3, U-5, and U-6. Eurostat publishes one monthly estimate of unemployment for the European Union, which is approximately midway between U-3 and U-4.
The unemployment statistics for the USA are collected through a monthly Current Population Survey (CPS) (also known as the household survey) and an establishment survey.
The US Bureau of Labor Statistics regularly publishes six estimates of unemployment. The others are U-1, U-2, U-3, U-5, and U-6. Eurostat publishes one monthly estimate of unemployment for the European Union, which is approximately midway between U-3 and U-4.
The unemployment statistics for the USA are collected through a monthly Current Population Survey (CPS) (also known as the household survey) and an establishment survey.
U-4 includes all individuals that are unemployed as well as people known as discouraged workers. These people are then reported as a percentage of the combined civilian labor force and discouraged workers. Discouraged workers are defined as unemployed workers who have searched for employment within the last 12 months that have cited an economic reason for no longer looking for work. These reasons could range from “There just aren’t any job openings in my area.” to “I keep getting turned down for interviews, so why bother?”
{Nebraska Workforce Trends|October 2009}
{Nebraska Workforce Trends|October 2009}
by Abu Yahya July 15, 2010
Get the U-4mug. (FINANCE) originally, a bond rated as not investment grade by a credit rating agency (e.g., Standard & Poor, Ernst & Young, or Moody's).
Later, a bond was a financial instrument deliberately created to have absurdly high levels of risk (of default), which was then priced in and "hedged" by a fund manager. Junk bonds are routinely used to finance leveraged buyouts.
Later, a bond was a financial instrument deliberately created to have absurdly high levels of risk (of default), which was then priced in and "hedged" by a fund manager. Junk bonds are routinely used to finance leveraged buyouts.
Michael Milken was the junk bond innovator who figured out how to make them an effective investment vehicle. Yes, he later went to jail for securities law violations.
by Abu Yahya September 1, 2010
Get the junk bondmug. In economics, a monetary policy in which the value of the local currency is determined by the foreign exchange markets, with some intervention by the government (or its allies) in the event of excessive or dangerous movements.
Usually the term is applied when the country ignores long term shifts in value, but intervenes directly to avoid crises.
Usually the term is applied when the country ignores long term shifts in value, but intervenes directly to avoid crises.
Most of the nations in the world have neither a hard peg nor floating currency, but something in between--a dirty float, in which trade is under some restrictions.
by abu yahya June 24, 2008
Get the dirty floatmug. (ECONOMICS) crisis created when a government or firm cannot pay its obligations in any reasonable time frame. Often confused with illiquidity, which is a when an entity suffers a temporary shortage of cash.
When a firm has assets that are greater than liabilities, it is solvent. In a lot of cases, the management of a firm runs out of ways to make money with the assets it has, so it "invests" in poor quality assets with high risk of default (for example, by lending money to borrowers using inflated housing prices as collateral).
When a firm has assets that are greater than liabilities, it is solvent. In a lot of cases, the management of a firm runs out of ways to make money with the assets it has, so it "invests" in poor quality assets with high risk of default (for example, by lending money to borrowers using inflated housing prices as collateral).
Most of the time, insolvency is the result of corrupt or feckless management. In a few cases, however, it can be the result of a vicious cycle in which a well-managed company's customers all become insolvent first.
by Abu Yahya May 5, 2010
Get the insolvencymug. title of book by John Maynard Keynes (1883-1946) outlining the general concept of Keynesian economics. The book was published in 1936.
*Context*
______________________________
Prior to the Great Depression, opinions about how to properly manage the economy were dominated by Neoclassical economics, which advocated little government intervention. In particular, unemployment was regarded as the consequence of workers failing to accept wages sufficiently low to permit full employment.
During the Great Depression, unemployment soared to 25% in the USA and Germany. Economics had no advice to give to leaders anxious to do something, and none of the neoclassical predictions were coming true. The government of the UK commissioned J.M. Keynes to lead a commission of top British economists in a general review of economic theory; their finding were summarized by Keynes in *The General Theory*.
*The Findings*
______________________________
The Cambridge team did not have access to statistics of national income and product accounting (NIPA). They did have some data on unemployment and prices, especially from the USA.
Keynes also identified several inherent logical problems with neoclassical economic theory about saving and investment. The theory said that all economic output of an economy would tend to be consumed; all saving would be invested; and all workers would be employed, *provided wages fell low enough*.
Keynes noted the economic mechanism by which investment occurs has little to do with the existing rate of saving; both are influenced by interest rates, but other forces come into play (e.g., liquidity preference for saving, business opportunities and user cost for investment). Hence, aggregate demand can drift very far out of alignment with output (or potential output).
Another finding was that employment rates actually did not respond in a predictable way to the fall in wages. The US economy suffered periods when a reduction in the wage level lead to increases in employment, despite the assumption that workers would have withdrawn from the labor market.
Finally, Keynes proposed the use of monetary policy and fiscal policy for regulating business cycles.
*Context*
______________________________
Prior to the Great Depression, opinions about how to properly manage the economy were dominated by Neoclassical economics, which advocated little government intervention. In particular, unemployment was regarded as the consequence of workers failing to accept wages sufficiently low to permit full employment.
During the Great Depression, unemployment soared to 25% in the USA and Germany. Economics had no advice to give to leaders anxious to do something, and none of the neoclassical predictions were coming true. The government of the UK commissioned J.M. Keynes to lead a commission of top British economists in a general review of economic theory; their finding were summarized by Keynes in *The General Theory*.
*The Findings*
______________________________
The Cambridge team did not have access to statistics of national income and product accounting (NIPA). They did have some data on unemployment and prices, especially from the USA.
Keynes also identified several inherent logical problems with neoclassical economic theory about saving and investment. The theory said that all economic output of an economy would tend to be consumed; all saving would be invested; and all workers would be employed, *provided wages fell low enough*.
Keynes noted the economic mechanism by which investment occurs has little to do with the existing rate of saving; both are influenced by interest rates, but other forces come into play (e.g., liquidity preference for saving, business opportunities and user cost for investment). Hence, aggregate demand can drift very far out of alignment with output (or potential output).
Another finding was that employment rates actually did not respond in a predictable way to the fall in wages. The US economy suffered periods when a reduction in the wage level lead to increases in employment, despite the assumption that workers would have withdrawn from the labor market.
Finally, Keynes proposed the use of monetary policy and fiscal policy for regulating business cycles.
The *The General Theory of Employment, Interest, and Money* completely shook up the world of economic policy. Hereafter, governments took responsibility for economic conditions or they lost power.
by Abu Yahya March 3, 2009
Get the The General Theory of Employment, Interest, and Moneymug.