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From: tac@teldata.UUCP
Newsgroups: net.politics
Subject: Re: YOU EARNED IT??? - (nf)
Message-ID: <309@teldata.UUCP>
Date: Mon, 16-Apr-84 18:40:55 EST
Article-I.D.: teldata.309
Posted: Mon Apr 16 18:40:55 1984
Date-Received: Tue, 17-Apr-84 08:25:22 EST
References: <1527@mit-eddi.UUCP> <29200125@uiucdcs.UUCP>, <1607@mit-eddie.UUCP>
Organization: Teltone Corp., Kirkland, WA
Lines: 36

, (sop to the blank line eaters--consider it a religious sacrifice)

>>  From: lkk@mit-eddie.UUCP (Larry Kolodney)
>>  
>> >From renner:
>> >Don't they teach basic macroeconomics to undergraduates any more?  If they
>> >do, then where does the myth that increased consumer demand is beneficial to
>> >the economy come from?
>>  ---
>>  Well, I happen to be taking a course in Macroeconomics this term, and
>>  the first  thing they teach us is that an increase in demand has the
>>  following effect on GNP:
>>  
>>  (DELTA)Y=(ALPHA)*(DELTA)(ABAR),
>>  
>>  where (DELTA)Y= change in GNP, (DELTA)ABAR is change in autonomous
>>  spending (in this case due to govt. spending) and (ALPHA) is a constant
>>  called the multiplier.  Of course the complete model is much more
>>  complex and takes such things as rising interest rates and investment
>>  into acct.  But these only ask whether govt. spending is the most
>>  efficient way to increase gnp.  The relationship does still exist.
>>  -- 
>>  Larry Kolodney
>>  (The Devil's Advocate)
>>  
The problem Larry is that (DELTA)ABAR can only be positive if the government
pumps money in from nowhere.  If they take $10000000000000000000. in and
hand out all but $.01 there is loss in the system and (DELTA)ABAR has been
decreased.  Now if you would like some statistics on just how efficient 
they really are....


	    From the Soapbox of
	    Tom Condon     {...!uw-beaver!teltone!teldata!tac}

	    A Radical A Day Keeps The Government At Bay.