Productivity lowers
cost and prices and lower cost and prices also increase productivity...
The theory of
comparative advantage says that specialize that line of production which uses
abundant and cheap factor of production...
The oppourtunity cost
should be low...
The US is a capital
rich country with higher income and savings and investment, desired saving is
higher than desired investment and there is a downward pressure on the nominal
interest rate and prices and real interest rate...
The Central Bank is
artificial to create scarcity and higher cost of Capital which has reduced loan
or debt demand by the blue collar workers, not just for the rich...
In short... for
everybody leading to lower demand/supply or economy activity and
investment-employment and accelerator and multiplier and the growth rate...
Improved savings and
supply have resulted in lower cost and lower nominal and lower real interest
rate and further savings and investment... and growth...
The lower cost of
capital should be transmitted to lower prices through higher supply and higher
real wage and consumption, saving and investment demand, and growth...
There is no scarcity
of capital in the US when others are pouring money, too...
Higher cost of the
Capital/ist is the higher prices for the Labour/ist too... ... ...
The savings rate has
unexpectedly dropped in the past 6 months and so has the growth rate... higher
borrowing cost and prices have negatively stroked savings and growth since the
first quater of the year ...
In the same period the Fed hiked the most...
Inflation did fall, but has recovered probably due to higher interest cost...,
But growth has fallen
in the first half and in the second half recovered little to high growth in 2015 (rev.)...
Both, household debt
and debt to GDP ratio has gone down with growth and growth with them...
No comments:
Post a Comment