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Visually, that's pretty much everything you need to know about economics right there.
by ThatBritGuy (thatbritguy (at) googlemail.com) on Thu Nov 3rd, 2011 at 01:48:09 PM EST
[ Parent ]
... economists attach more weight to the fictional "long run growth track" line than to the "Actual GDP" line?

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
by BruceMcF (agila61 at netscape dot net) on Thu Nov 3rd, 2011 at 02:58:01 PM EST
[ Parent ]
In fact, as Richard Koo demonstrated WRT Japan since 1990, the slope of the line can drastically change and the starting point of any new growth can be at or below the maximum level reached before the contraction began. That is how you get "lost decades". The foregone production, if considered as the integral of the volume between a projection of the original growth line and the actual rate experienced, may never even close and may expand indefinitely.

I think that is almost certain to be the case for decades in the USA, whether the slope is taken from the growth rate prior to 1970, 1990, 2000 or 2007. I guess the "mainstream" can just keep redefining the slope forever in preference to admitting their assumptions are fallacious.

"It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sat Nov 5th, 2011 at 11:02:45 AM EST
[ Parent ]
Since the dawn of time people have known that if you destroy something you will have to spend time and resources to repair it before you can start using it again. Apparently this was lost on modern economics.

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se
by A swedish kind of death on Sat Nov 5th, 2011 at 11:11:51 AM EST
[ Parent ]
An axiomatic-deductive system of thought needs no firm connection to physical reality. Elegance of form and the appeal of the axioms will do nicely.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sat Nov 5th, 2011 at 11:16:35 AM EST
[ Parent ]
And thus the amount of angels on the pinhead can continue to increase according to the longterm growth path after the pin has been tipped over and then return to an upright position.

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se
by A swedish kind of death on Sat Nov 5th, 2011 at 11:50:44 AM EST
[ Parent ]
funniest comment of the week!

'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty
by melo (melometa4(at)gmail.com) on Sat Nov 5th, 2011 at 07:34:00 PM EST
[ Parent ]

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