Scot Wick Blog

  Mostly summarized from Gregory Mankiw’s Principles of Economics, 5th Ed. PART 9 The Real Economy in the Long Run Chapter 26 of 36 Saving, Investment, and the Financial System Section 15 of 25 … We will now build a model of financial markets. The purpose of this model is to help explain how financial markets coordinate the economy's saving and investment. The model also gives us a tool with which we can analyze government policies that influence saving and investment. … For simplicity, we assume · the economy has only one financial market called the market for loanable funds · all savers go to this market to deposit their savings · all borrowers go to this market to borrow money as loans The term loanable funds refers to · all income people choose to save and deposit in savings rather than spend for current consumption · which equals the amount investors choose to borrow to fund new investment projects … In this simplified model, the market for loanable funds has one interest rate...

  Mostly summarized from Gregory Mankiw’s Principles of Economics, 5th Ed. PART 9 The Real Economy in the Long Run Chapter 26 of 36 Saving, Investment, and the Financial System Section 14 of 25 … The terms saving and investment can be confusing. Suppose Tom earns more than he now wants to spend. He deposits his unspent income in a bank or buys some stock or bonds. He thinks of his act as investing his money. But to an economist investment means the purchase of new capital including equipment and buildings, so Tom's act is saving not investment. By spending less than his income Tom is adding to the nation’s saving. … When Tom borrows from a bank to finance building a new house for himself he adds to the nation's investment. The purchase of a new house is the one form of household spending that is considered investment rather than consumption. When Apex Corporation sells stock and uses the proceeds to build a new factory it adds to the nation's investment. … The accounting id...

Mostly summarized from Gregory Mankiw’s Principles of Economics, 5th Ed. PART 9 The Real Economy in the Long Run Chapter 26 of 36 Saving, Investment, and the Financial System Section 13 of 25 … GDP (Y) consists of four components of expenditure · consumption, C · investment, I · government purchases, G · net exports, NX So, Y = C + I + G + NX … Here we simplify the analysis of GDP by assuming the economy is closed. A closed economy (within one country) does not interact with other economies. It does not -participate in international trade in goods, having no exports nor imports -participate in international borrowing and lending Assuming a closed economy is a useful simplification we can use to learn some lessons that apply to all economies. It can also be considered a model of a completely integrated world economy, with no imports nor exports, as within the U.S. … A closed economy does not have international trade imports and exports are zero, so net exports, NX, are zero. So, in ...

  The Laffer Curve – Lower Tax Rates Now Mean Higher Tax Revenues Later Sources include Gregory Mankiw’s Principles of Economics, 5th Ed., and ChatGPT. At a meeting in 1974 economist Arthur Laffer drew a figure to show how tax rates affect tax revenue, looking like Figure 1. He said the United States was on the downward-sloping right side of the curve, point A. This meant tax rates were so high reducing them would raise tax revenue, up toward point C. Why? The tax rate cut would stimulate so much additional economic activity that tax revenues would increase. The Laffer curve theory of too-high taxes was resulting in low tax revenues was accepted by President Ronald Reagan. The views of Laffer and Reagan became known as supply-side economics. Supply-side economists contend the Reagan tax cuts and economy boom of the 1980s proved the Laffer Curve. … Per Figure 1 the goal of Democrat politicians is to be at point C. They want to set tax rates where current tax revenues are maximized. ...

  Fumiko Scot's information: Weight at 166 pounds, got to 160 pounds five years ago and have recently been bouncing between 163 and 168. Common sense ways to lose and keep off weight are eat right and light and get lots of exercise. Main exercise is walking, do 1~2 miles most days. Over career worked as a salesman in the steelmaking, fasteners, and auto manufacturing industries, lots of travel in U.S., Canada, Mexico, and Japan. Have visited every U.S. city with a major league, MLB, NFL, NBA, NHL, sports team except Sacramento, have gotten as close as Travis Air Force Base. Often traveled on Sundays, much time on the road so could not eat right and get enough exercise so got heavy, up to 200 lbs. Was on commission and made enough to retire early, able eat good food and get enough exercise. Now spend most time reading and writing. Our Wick branch goes back to the brother of owner of the Wick House at Morristown National Historical Park in Morristown New Jersey, and on back to Staine...

  “The world we see that seems so insane is the result of a belief system that is not working. To perceive the world differently, we must be willing to change our belief system, let the past slip away, expand our sense of now, and dissolve the fear in our minds.” - William James “All experience has shown mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed.” - Thomas Jefferson “Wherever good fortune enters, envy lays siege and attacks it. And when it departs, sorrow and repentance remain behind.” - Leonardo da Vinci “Struggle is the indispensable accompaniment of progress. If men were entirely social, man would stagnate. A certain alloy of individualism and competition is required to make the human species survive and grow. Without qualities of an unsocial kind men might have led an Arcadian shepherd life in complete harmony, contentment, and mutual love. But in that case all their talents wou...