Another "simple" economics question

[sam h]

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Thats sort of a broad statement. I think its more accurate to say that most that study this agree that government has some role, but I think the extent of that role is still to be determined.

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I agree that there is a lot of variation in opinion, and probably my statement was too sweeping. But I do think there is a perceptible change among younger people in economics towards rethinking the role of the state and moving away from minimalism.

[vulturesrow]

I dunno, Im still leery of that statement even. I wont be assimilated that easily! Actually being a fairly ardent supply sider myself, it would be hard to deny the role of gov't in the economy.

[sam h]

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I wont be assimilated that easily!

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Not my intention at all! [img]/images/graemlins/grin.gif[/img]

Perhaps it is best to say that some of these ideas are really back on the table within the discipline, and that is reflected by things like Daron Acemoglo winning the John Bates Clark award this year. But whether that becomes a more lasting reorientation only time will tell.

[Il_Mostro]

Energy

[vulturesrow]

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Not my intention at all! [img]/images/graemlins/grin.gif[/img]

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Suuuuuuure.


[ QUOTE ]
Perhaps it is best to say that some of these ideas are really back on the table within the discipline, and that is reflected by things like Daron Acemoglo winning the John Bates Clark award this year. But whether that becomes a more lasting reorientation only time will tell.

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Some of his work on labor markets looks interesting but I havent had a chance to delve into it yet.

[[censored]]

Either using a greater quantity of resources or using the same quantity of resources more efficiently or some combination of the 2.

[tshort]

Mrgold has it correct. For the economy to grow, we need to produce more.

Increasing the percentage of the population in the work force could only increase so much. We could increase how much we work, but that, too, has a limit. So, we can make lots of babies, enslave people, or have workers produce more in the same time period (education, technology).

[Il_Mostro]

It all boils down to available energy

[Darryl_P]

Being of a mindset that the more we produce and consume, the better, and actually doing it.

The main drivers of today's economy are the baby boomers. These people grew up in the aftermath of a major war and so they are well conditioned to building and creating stuff and enjoying the creations.

The next couple of generations OTOH grew up (and are growing up) getting everything spoonfed to them and are being told that building and creating stuff is good. But without first-hand experience from the war aftermath they are asking questions like "is that really the most important"? Many are figuring out ways to get by without working so hard, even if it means consuming less.

This generational mindset change is the biggest threat to the economy IMO. Once the baby boomers retire (next 10-15 years), the major contributing force will become a major depleting force (drawing all those social security pensions which are pay-as-you-go funded), and the ones left holding the bag will be of a less motivated mindset.

Add to all that the huge levels of debt and unbacked paper currency and we're in for big, big trouble in about 10-15 years' time.

I can't prove it of course but this is the scenario I'm running with. Best way to prepare: buy precious metals at a level of at least 10% of net worth. When gold hits $1000 an ounce, don't say I didn't warn you!

Better use of the factors of production leading to an outward shift of the production possibility frontier.