THANK YOU SO MUCH MR.HOLDEN,ITS FUNNY HOW WE COULD ACTUALLY COME ON RUclips TO ACQUIRE MORE KNOWLEDGE FROM YOUR LECTURES, PROBABLY MORE THAN WE DO IN THE UNIVERSITY SOMETIMES,WE GET THIS FREE OF CHARGE FROM YOU,MAYBE GOD BLESS YOU AND YOUR FAMILY,KEEP UP WITH THE GOOD WORK SIR.
For me, this is perfect. I've got mine in a few days and he made this video around the exact time my exam was written, so everything he spoke about is likely to be extremely relevant.
you are amazing! way wayyyy better than all my teachers .... and I am an MBA student in a top 4 (in the world) business school. Wish snooty expensive B schools could source teaching talent like yourself and replace our current overpaid under-effective teachers...
Thanks for the new video!! Thanks a bunch! exams are right around the corner and you've been helping me so much with your videos :) Keep up the good work!! :)
Love this guy. Every video I've seen thus far has been great. Accurate, and realistic. Glad to see him explain how austerity during a recessed time is a bad idea. I do have some issues with this video though. First, the limit on gov spending only impacts currency users. The Eurozone being one. Those countries are restrained since they don't issue their own currency, while countries that do issue their own currency are not bound by any level of gov deficit. The US, UK, Japan for some examples Second, QE has not (as of March 2014) impacted the money supply. Here in the US recovery is still very weak, inflationary pressures are not here, and I believe the money supply has not really budged much. Maybe the money flowing around the banking system has exploded, but they are sitting on it. One economist I saw said the banks getting all this $$ maybe do some occasional shopping at a yard sale, aka it's just not getting into the real economy, maybe a leak here or there. This is why we've had a massive stock market boom here in the US, that's where the QE $ is going. I do think this is why QE is not just ineffective (based on real life evidence) but potentially dangerous, eventually the stock bubble will collapse (either due to QE tapering or it just crashing) and maybe this is the cause of Great Recession #2?
(Question) If the federal reserve bank creates more money to buy bonds from the government, wouldn't that money then be used reduce the budget deficit and contribute towards paying off national debt? If that statement is correct, how would that then lead to an inflationary response because that money created by the central banks, isn't in real terms, actually injecting into the circular flow of income, but instead it is being used to reduce the deficit? Is this analysis correct, because this has got me a little confused. Thank you :)
Thank you for this video once again. How would you explain the high inflation rates the UK is facing currently, when fiscal policy is being continuously contracted? There must be other reasons aside from cost-push factors?
@heckler73 Certainly if they still had the dracma, or the Irish the punt, then government might restore competitiveness through a devaluation of their currency. When Greece squeezed, just, into the euro their interest rates fell sharply and everyone, including the government started to borrow. It isn't just that the euro doesn't allow us to solve the problem through devaluation, it is also that the euro gave a false image of greek strength at the start of the euro era.
@Marine475 the government generates its revenues from taxation, and is also able borrow money, in order to increase it's spending, the borrowed money would not be printed so there is not a large risk of inflation but would already exist as stockpiles of foreign currency which other economies have or the central bank has. Government spending stimulates AD as people can demand more goods if their incomes are higher for e.g due to benefits spent by the government.
@93Meercat Also continuing from bigmangiff the UK is not self sufficient in food or energy and need to import and the UK is known to have a high propensity to import
@madcowhunter I did not state that the Euro was commodity-backed. What I am implying is that the way the Euro functions, with each member state not having sovereign control over their currency, it mimics the constraints that are similar to a commodity-backed currency (i.e. gold standard). In this case the "commodity" is the ECB (and its governance). Is that more clear?
My head doesn't compute. How government can spend money it doesn't have? Either it has to borrow it from people which means shifting consumption from people to bureaucrats or it borrows it from central bank which has to print it first thus creating inflation and all the mess with raw material prices. Also how government spending can "help" economy? How a businessman can plan for the future when so much of it depends on the moods and political agenda?
In “Occupying Chairlifts” a simple rule tweak on inheritance ends up changing the direction and purpose of modern human life! Here’s a fair way to transition forward to where we’re rewarded for cooperating and creating instead of competing and conquering. It's something specific we can demand. If this isnt the best answer, at least we’re thinking about what might be. Are we really just this close to having it work right? Oh yeah, it's a Ski movie! “Occupying Chairlifts” on RUclips!
Quick response to your previous video: a government may subsidise businesses when banks would not since government can work on a larger scale. For example, there could be 5 enterprises with large projects requiring funding that would, if any one were implemented and none of the other 4 were, it would likely fail. However if implemented together, they could support each other and turn a strong profit. Banks would look at the risks and benefits ceteris paribus, all else being equal, and accurately predict failure of the project. Since real life is not ceteris paribus, it would, at least in some circumstances, make sense for government to subsidise or provide cheap finance to firms or projects that can support one another.
I just have a question. Are you saying that money taken from people through tax is not re-invested? It seems logical that the government has as much controll over capital as it needs to provide people a basic living standard that is acceptable. Since money cant disapear, only circulate, how would tax cuts lead to more money being re-invested? It seems to me that all money that is taxed is not taken out of this circulation, thus ultimately it will also be re-invested.
Greece has no control over the issuance of its currency. Is that not why they are forced to do the austerity dance? The whole EU experiment is an example of why commodity-backed currency standards don't work (b/c of the Monetary Policy constraints)
I was very much aware that QE was a eumphemism for printing money, and I knew that the Fed was buying stocks and govt bonds, but I didn't know that that was where themoney printed in GE was going ... ominous, 1929 Weimar, yes?
Hi Sir. I've seen a lots of your video and they are amazing. I'm studying As in the Uk, and actually i've found something difficult for me in economics. the most difficult thing for me now is How to write an economics essay. Can u please help me to solve this problem?
Love to find an online MA in Econ. degree that is affordable. I have a BA in Econ. and MBA in Finance. Any suggestions for an online MA in Econ. degree?
Greece needs to leave the Euro and use thier own currency. With the lower valued currency, Greece can export more and more, especially since hte Euro has a higher exchange rate than the Dracma. Though it would be painful in the short term, eventually Greece will benefit from the Dracma. The US is different than Greece, the US interest rate is lower than inflation, thus the government shuold run deficit spending to increase spending in R&D, Education, INfrastructure, and etc. Borrow to invest
@Karamjit Singh : I think u might be able to find the answer to ur question in the point 5 of the following link :- economistsview.typepad.com/economistsview/2005/09/what_is_debt_mo.html
It's very misleading to represent the budget deficit in % of GDP. (I know, the whole of Europe does it, not blaming you). But these minor percentages might not indicate the severeness of the overspending. In fact, if I'm earning € 10.000 and I'm spending € 15.000, I'm overspending by 50 %. According to eurostat, for Greece this would include an overspending of.. revenues : 39,1 as opposed to spending 49,5 (both % of GDP) % overspending: 26,5 %. That looks much more frightening than your 7-8 %.
Thanks for the new video!! Thanks a bunch! exams are right around the corner and you've been helping me so much with your videos :) Keep up the good work!! :)
Thanks for the new video!! Thanks a bunch! exams are right around the corner and you've been helping me so much with your videos :) Keep up the good work!! :)
Thanks for the new video!! Thanks a bunch! exams are right around the corner and you've been helping me so much with your videos :) Keep up the good work!! :)
THANK YOU SO MUCH MR.HOLDEN,ITS FUNNY HOW WE COULD ACTUALLY COME ON RUclips TO ACQUIRE MORE KNOWLEDGE FROM YOUR LECTURES, PROBABLY MORE THAN WE DO IN THE UNIVERSITY SOMETIMES,WE GET THIS FREE OF CHARGE FROM YOU,MAYBE GOD BLESS YOU AND YOUR FAMILY,KEEP UP WITH THE GOOD WORK SIR.
Your videos were so useful during my A-levels, and now in my final year of university you are still a hero. Thanks Pajholden, you rock!
looking at this basically 5 years after it was uploaded and still very useful, thank you!
For me, this is perfect. I've got mine in a few days and he made this video around the exact time my exam was written, so everything he spoke about is likely to be extremely relevant.
you are amazing! way wayyyy better than all my teachers .... and I am an MBA student in a top 4 (in the world) business school.
Wish snooty expensive B schools could source teaching talent like yourself and replace our current overpaid under-effective teachers...
Best economics teacher ever! Everything is so much clearer! Perhaps a video on fishers equation?!
Pajholden ist the Messi of economics !!!
Thanks for the new video!! Thanks a bunch! exams are right around the corner and you've been helping me so much with your videos :) Keep up the good work!! :)
Love this guy. Every video I've seen thus far has been great. Accurate, and realistic.
Glad to see him explain how austerity during a recessed time is a bad idea.
I do have some issues with this video though.
First, the limit on gov spending only impacts currency users. The Eurozone being one. Those countries are restrained since they don't issue their own currency, while countries that do issue their own currency are not bound by any level of gov deficit. The US, UK, Japan for some examples
Second, QE has not (as of March 2014) impacted the money supply. Here in the US recovery is still very weak, inflationary pressures are not here, and I believe the money supply has not really budged much. Maybe the money flowing around the banking system has exploded, but they are sitting on it. One economist I saw said the banks getting all this $$ maybe do some occasional shopping at a yard sale, aka it's just not getting into the real economy, maybe a leak here or there. This is why we've had a massive stock market boom here in the US, that's where the QE $ is going.
I do think this is why QE is not just ineffective (based on real life evidence) but potentially dangerous, eventually the stock bubble will collapse (either due to QE tapering or it just crashing) and maybe this is the cause of Great Recession #2?
I admire how perfecly you can draw straight lines.
Thank you so much for your videos. You are an amazing teacher, i'm glad I found your videos you have helped me so much. Thank you!
You are such an amazing teacher! You make it so simple!
(Question) If the federal reserve bank creates more money to buy bonds from the government, wouldn't that money then be used reduce the budget deficit and contribute towards paying off national debt? If that statement is correct, how would that then lead to an inflationary response because that money created by the central banks, isn't in real terms, actually injecting into the circular flow of income, but instead it is being used to reduce the deficit? Is this analysis correct, because this has got me a little confused.
Thank you :)
Thank you for this video once again.
How would you explain the high inflation rates the UK is facing currently, when fiscal policy is being continuously contracted? There must be other reasons aside from cost-push factors?
I think its very interesting how government fiscal policy can directly affect the economy so drastically
@heckler73 Certainly if they still had the dracma, or the Irish the punt, then government might restore competitiveness through a devaluation of their currency. When Greece squeezed, just, into the euro their interest rates fell sharply and everyone, including the government started to borrow. It isn't just that the euro doesn't allow us to solve the problem through devaluation, it is also that the euro gave a false image of greek strength at the start of the euro era.
I just cried with laughter watching 8:56 - 9:04 over and over again. classic paj
@Marine475 the government generates its revenues from taxation, and is also able borrow money, in order to increase it's spending, the borrowed money would not be printed so there is not a large risk of inflation but would already exist as stockpiles of foreign currency which other economies have or the central bank has. Government spending stimulates AD as people can demand more goods if their incomes are higher for e.g due to benefits spent by the government.
@bigmangiff I understand that, but surely all other oil-dependent economies should be suffering from this cost-push inflation as well?
@93Meercat Also continuing from bigmangiff the UK is not self sufficient in food or energy and need to import and the UK is known to have a high propensity to import
Great video!
What reason do think that the governments may have for using policy that goes against economic theory?
You are amazing sir !!! Thank you.... Wish you were my teacher Econ would have been much better
Too awesome
@madcowhunter I did not state that the Euro was commodity-backed. What I am implying is that the way the Euro functions, with each member state not having sovereign control over their currency, it mimics the constraints that are similar to a commodity-backed currency (i.e. gold standard). In this case the "commodity" is the ECB (and its governance). Is that more clear?
My head doesn't compute. How government can spend money it doesn't have? Either it has to borrow it from people which means shifting consumption from people to bureaucrats or it borrows it from central bank which has to print it first thus creating inflation and all the mess with raw material prices. Also how government spending can "help" economy? How a businessman can plan for the future when so much of it depends on the moods and political agenda?
I love how Italy wasn't a problem 6 months ago :)
In “Occupying Chairlifts” a simple rule tweak on inheritance ends up changing the direction and purpose of modern human life! Here’s a fair way to transition forward to where we’re rewarded for cooperating and creating instead of competing and conquering.
It's something specific we can demand. If this isnt the best answer, at least we’re thinking about what might be. Are we really just this close to having it work right?
Oh yeah, it's a Ski movie! “Occupying Chairlifts” on RUclips!
Mr Holden, How can Greece be in so much debt when we have a master economist like you living in the country?.
Quick response to your previous video: a government may subsidise businesses when banks would not since government can work on a larger scale. For example, there could be 5 enterprises with large projects requiring funding that would, if any one were implemented and none of the other 4 were, it would likely fail. However if implemented together, they could support each other and turn a strong profit. Banks would look at the risks and benefits ceteris paribus, all else being equal, and accurately predict failure of the project. Since real life is not ceteris paribus, it would, at least in some circumstances, make sense for government to subsidise or provide cheap finance to firms or projects that can support one another.
@heckler73 since when euro is commodity backed currency?
I just have a question. Are you saying that money taken from people through tax is not re-invested?
It seems logical that the government has as much controll over capital as it needs to provide people a basic living standard that is acceptable. Since money cant disapear, only circulate, how would tax cuts lead to more money being re-invested? It seems to me that all money that is taxed is not taken out of this circulation, thus ultimately it will also be re-invested.
Greece has no control over the issuance of its currency. Is that not why they are forced to do the austerity dance?
The whole EU experiment is an example of why commodity-backed currency standards don't work (b/c of the Monetary Policy constraints)
you are my hero
I was very much aware that QE was a eumphemism for printing money, and I knew that the Fed was buying stocks and govt bonds, but I didn't know that that was where themoney printed in GE was going ... ominous, 1929 Weimar, yes?
Hi Sir. I've seen a lots of your video and they are amazing. I'm studying As in the Uk, and actually i've found something difficult for me in economics. the most difficult thing for me now is How to write an economics essay. Can u please help me to solve this problem?
not anymore i checked it seems to be removed i think
you're incredibly helpful
I am fine - at least I was this morning. Do you know something that I don't?
I freaking love you man :D thank you so much for the video
please what means orthodox fiscal policies. and what is the constrast with the view of keynes. thks
Course is bias and does not cover that.
Love to find an online MA in Econ. degree that is affordable. I have a BA in Econ. and MBA in Finance. Any suggestions for an online MA in Econ. degree?
Quantitative Easing Unlimited is the new supreme monetary law of the land
I love you !!!!!
Thats one thing you never see 0 dislikes!
I think you need to consider the definition of the word "invest". Spending tax money on government spending is not investing.
had my first macro pajgasam
i wish u were my teacher
Greece needs to leave the Euro and use thier own currency. With the lower valued currency, Greece can export more and more, especially since hte Euro has a higher exchange rate than the Dracma. Though it would be painful in the short term, eventually Greece will benefit from the Dracma.
The US is different than Greece, the US interest rate is lower than inflation, thus the government shuold run deficit spending to increase spending in R&D, Education, INfrastructure, and etc. Borrow to invest
@Karamjit Singh : I think u might be able to find the answer to ur question in the point 5 of the following link :-
economistsview.typepad.com/economistsview/2005/09/what_is_debt_mo.html
It's very misleading to represent the budget deficit in % of GDP.
(I know, the whole of Europe does it, not blaming you). But these minor percentages might not indicate the severeness of the overspending. In fact, if I'm earning € 10.000 and I'm spending € 15.000, I'm overspending by 50 %.
According to eurostat, for Greece this would include an overspending of..
revenues : 39,1 as opposed to spending 49,5 (both % of GDP)
% overspending: 26,5 %.
That looks much more frightening than your 7-8 %.
Quantitative easing sounds like a silly idea to me
Hi Mr Holden, could you make an appearance at a dinner party of mine? Ta!
there is one. look carefully bro
Rip, Paj Holden, you were a great teacher, cannot believe you died today rip sir.
great video! kid in the background is really really annoying though
It would be hilarious if you were doing this in a hawiian shirt lol.
Thanks for the new video!! Thanks a bunch! exams are right around the corner and you've been helping me so much with your videos :) Keep up the good work!! :)
Thanks for the new video!! Thanks a bunch! exams are right around the corner and you've been helping me so much with your videos :) Keep up the good work!! :)
Thanks for the new video!! Thanks a bunch! exams are right around the corner and you've been helping me so much with your videos :) Keep up the good work!! :)