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Global Economic Intersection

What Is Keeping the Wine Industry So Prosperous?

by Elliott Morss, Morss Global Finance Introduction Times are good in the wine industry. Consumption is growing and French vineyards are selling for millions as are vineyards in Napa. Below, I discuss the reasons things are so good and the few dark clouds on the horizon. In sum, things are good because of vineyard promotions, consumer ignorance and vanity, wine ratings, and good salesmanship. Clouds on the horizon include growing consumer awareness and the “blenders.” Follow up: Please...

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Marginalist Microeconomics: The Path to Totalitarian Tyranny

by Philip Pilkington Fixing the Economists Article of the Week Kevin Hoover, although not generally well-known in Post-Keynesian circles, is easily one of the most interesting economists writing on epistemology and ontology today. He was originally an applied macroeconomist but, like anyone who is remotely philosophically literate, he quickly began to see an awful lot of problems with both the econometric approach and with the models that were generally being used — most particularly,...

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How to Drink from a Firehose

by John Mauldin, Thoughts from the Frontline Basic economics tells us all resources are scarce, but our demand for them is not. Hence we need methods to allocate the limited supply of each resource. A significant part of economics is the study of those methods. Follow up: Please share this article - Go to very top of page, right hand side for social media buttons. One exception to the rule, though, has developed in the last few years: The amount of information available to us is...

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Angst in America, Part 7: The Angst of the Millennial Generation

by John Mauldin, Thoughts from the Frontline “There are two ways to conquer and enslave a nation. One is by the sword. The other is by debt.”– John Adams, 1826 “The problem with fiat money is that it rewards the minority that can handle money, but fools the generation that has worked and saved money.”– Adam Smith Follow up: Please share this article - Go to very top of page, right hand side for social media buttons. “Being young and having no job remains stubbornly common. Wages for...

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Making Sense of the Sterling Depreciation of 2007-2008

by Philip Pilkington Something rather strange happened in Britain around the time of the financial crisis. The sterling tanked, import prices rose substantially and yet the inflation rate didn’t respond as much as we might assume. Follow up: Please share this article - Go to very top of page, right hand side for social media buttons. Other weird stuff happened too. For example, export prices rose rather than fell and the trade deficit worsened. Although these two aspects seem to totally...

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The US Has Been Running a Huge Trade Deficit for Years: How Can This Happen Without the Dollar Weakening?

by Elliott Morss, Morss Global Finance Introduction Many bemoan the large US trade deficit which represents the difference between the export and import of certain goods and services. Since 2000, the US has run an annual deficit ranging between $362 Billion (2001) and $762 billion (2006). Imports require Americans to spend dollars thereby increasing global dollar supplies while US exports reduce dollar supplies. That means imports should weaken the dollar while exports should strengthen...

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The Fading American Dream: Trends in Absolute Income Mobility since 1940

 by Raj Chetty, David Grusky, Maximilian Hell, Nathaniel Hendren, Robert Manduca and Jimmy Narang, Voxeu.org Posted originally at Voxeu.org 05 May 2017 One of the defining features of the ‘American Dream’ is the ideal that children have a higher standard of living than their parents. This column examines rates of ‘absolute income mobility’ – the fraction of children who earn more than their parents – to assess whether the US is living up to this ideal. Rates of absolute mobility have...

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Misdirection: Galbraith on Piketty’s Book on Capital

by Philip Pilkington Article of the Week from Fixing the Economists Note:  This article was written in April 2014. I’ve been waiting for this for some time but now Jamie Galbraith has come out and provided an extensive discussion of Thomas Piketty’s new book Capital in the Twentieth Century. While I haven’t yet read Piketty’s book its difficult not to have heard about it given how much of a response it is getting among economics types. Follow up: Please share this article - Go to very...

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What has Bank Capital ever Done for Us?

by Voxeu.org -- this post authored by Oscar Jorda, Bjorn Richter, Moritz Schularick, and Alan Taylor Higher capital ratios are unlikely to prevent a financial crisis. This is empirically true both for the entire history of advanced economies from 1870 to 2013 and for the post-WW2 period, and holds both within and between countries. The authors of this column reach this conclusion using newly collected data on the liability side of banks’ balance sheets in 17 countries. However, higher...

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Angst in America, Part 6: Middle Class Blues

by John Mauldin, Thoughts from the Frontline “We of the sinking middle class may sink without further struggles into the working class where we belong, and probably when we get there it will not be so dreadful as we feared; for, after all, we have nothing to lose.”– George Orwell “A strong, educated middle class is what made America the greatest country in the world.”– Lincoln Chafee Follow up: As we continue our tour of the widespread angst afflicting investors large and small today,...

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