Comments on: Unemployment and inflation: understanding the Fed’s balancing act http://welkerswikinomics.com/blog/2008/03/09/unemployment-down-but-more-people-out-of-work/ for students and teachers of Economics Wed, 08 Feb 2012 23:39:55 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Taryn http://welkerswikinomics.com/blog/2008/03/09/unemployment-down-but-more-people-out-of-work/comment-page-1/#comment-4604 Taryn Wed, 19 Mar 2008 10:39:57 +0000 http://welkerswikinomics.com/blog/2008/03/09/unemployment-down-but-more-people-out-of-work/#comment-4604 I honestly do not like the way unemployment in the US is counted. The numbers we see are not the "real" unemployment rate because it discounts discouraged workers, retired persons, people on sabbatical, etc. I think that the unemployment should count all of those people and then have several other numbers that show unemployment minus certain persons such as retired persons. I think then we would have a better understanding of unemployment and avoid the confusion between the unemployment rate and number. I honestly do not like the way unemployment in the US is counted. The numbers we see are not the "real" unemployment rate because it discounts discouraged workers, retired persons, people on sabbatical, etc. I think that the unemployment should count all of those people and then have several other numbers that show unemployment minus certain persons such as retired persons. I think then we would have a better understanding of unemployment and avoid the confusion between the unemployment rate and number.

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]]> By: Trevor Sun http://welkerswikinomics.com/blog/2008/03/09/unemployment-down-but-more-people-out-of-work/comment-page-1/#comment-4587 Trevor Sun Tue, 18 Mar 2008 21:40:37 +0000 http://welkerswikinomics.com/blog/2008/03/09/unemployment-down-but-more-people-out-of-work/#comment-4587 I agree, monetary and fiscal policies could be used to fix the economy but is the U.S. government doing any of this? probably not... I agree, monetary and fiscal policies could be used to fix the economy but is the U.S. government doing any of this? probably not…

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]]> By: Charlie.Gao http://welkerswikinomics.com/blog/2008/03/09/unemployment-down-but-more-people-out-of-work/comment-page-1/#comment-4537 Charlie.Gao Tue, 18 Mar 2008 00:01:30 +0000 http://welkerswikinomics.com/blog/2008/03/09/unemployment-down-but-more-people-out-of-work/#comment-4537 Monetary policy, along with fiscal policy can be used together to bring economy back to full employment level. Inflation indeed is a problem therefore measures should be taken to improve it. Monetary policy, along with fiscal policy can be used together to bring economy back to full employment level. Inflation indeed is a problem therefore measures should be taken to improve it.

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]]> By: Conrad Liu http://welkerswikinomics.com/blog/2008/03/09/unemployment-down-but-more-people-out-of-work/comment-page-1/#comment-4513 Conrad Liu Mon, 17 Mar 2008 20:41:54 +0000 http://welkerswikinomics.com/blog/2008/03/09/unemployment-down-but-more-people-out-of-work/#comment-4513 Obviously, this drop in employment is not at all wanted in an economy in danger (or already in) of a recession. As we speak, if the Fed's have not yet taken steps large enough to impede this decrease in growth (or negative growth), there can be no doubt that the unemployment rate will go even lower; that is to say, the number of discouraged workers will increase, which causes the economy to go even lower in the full employment level that it already is. Obviously, this drop in employment is not at all wanted in an economy in danger (or already in) of a recession. As we speak, if the Fed's have not yet taken steps large enough to impede this decrease in growth (or negative growth), there can be no doubt that the unemployment rate will go even lower; that is to say, the number of discouraged workers will increase, which causes the economy to go even lower in the full employment level that it already is.

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]]> By: claire425 http://welkerswikinomics.com/blog/2008/03/09/unemployment-down-but-more-people-out-of-work/comment-page-1/#comment-4505 claire425 Mon, 17 Mar 2008 19:30:21 +0000 http://welkerswikinomics.com/blog/2008/03/09/unemployment-down-but-more-people-out-of-work/#comment-4505 Wow it is interesting that a lower unemployment rate does not necessarily means the economy is in a better state. It is always the main concern, when demand goes up, inflation goes up at the same time. Well,it is true that the governmetn is in hurry to fix the unemployment rate to a higher level, but in the long run, it is actually not that true. What if the net export due to the higher price level decreases, and weaken the value of dollars? It could actually result in a bigger loss. Therefore, agreeing to Helen's point that the government should find the "middle point", I just hope that by doing the calculations and estimating accurately, the government to find the upmost profitable point for the economy. Wow it is interesting that a lower unemployment rate does not necessarily means the economy is in a better state. It is always the main concern, when demand goes up, inflation goes up at the same time. Well,it is true that the governmetn is in hurry to fix the unemployment rate to a higher level, but in the long run, it is actually not that true. What if the net export due to the higher price level decreases, and weaken the value of dollars? It could actually result in a bigger loss. Therefore, agreeing to Helen's point that the government should find the "middle point", I just hope that by doing the calculations and estimating accurately, the government to find the upmost profitable point for the economy.

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]]> By: KatherineYang http://welkerswikinomics.com/blog/2008/03/09/unemployment-down-but-more-people-out-of-work/comment-page-1/#comment-4503 KatherineYang Mon, 17 Mar 2008 19:22:44 +0000 http://welkerswikinomics.com/blog/2008/03/09/unemployment-down-but-more-people-out-of-work/#comment-4503 The rising energy prices makes me wonder, if we'd just been more careful about the environment to begin with, just how much money would we be saving now? I'm talking about energy prices, the money spent on preserving what's left of the environment, no to mention the money spent on debating the whole environmental issue back and forth. Doesn't have much to do with the blog post...I was just wondering. The rising energy prices makes me wonder, if we'd just been more careful about the environment to begin with, just how much money would we be saving now? I'm talking about energy prices, the money spent on preserving what's left of the environment, no to mention the money spent on debating the whole environmental issue back and forth.

Doesn't have much to do with the blog post…I was just wondering.

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]]> By: Helen http://welkerswikinomics.com/blog/2008/03/09/unemployment-down-but-more-people-out-of-work/comment-page-1/#comment-4457 Helen Sat, 15 Mar 2008 01:55:13 +0000 http://welkerswikinomics.com/blog/2008/03/09/unemployment-down-but-more-people-out-of-work/#comment-4457 Relating this to the other blog post that I just read about, the one about the impact on global inflation of America's monetary policy, I am wondering if Bernanke takes into consideration the implications for the global economy when he makes a decision regarding monetary policy in America. I know the Fed is always trying to find the optimal "middle road" monetary policy for America that will neither induce excessive inflation as a side effect nor exacerbate the problem of unemployment, but how big of a role does the global economy play in this decision-making process? In other words, how much does the global economy weigh when the Fed is making decisions for the domestic economy? Relating this to the other blog post that I just read about, the one about the impact on global inflation of America's monetary policy, I am wondering if Bernanke takes into consideration the implications for the global economy when he makes a decision regarding monetary policy in America. I know the Fed is always trying to find the optimal "middle road" monetary policy for America that will neither induce excessive inflation as a side effect nor exacerbate the problem of unemployment, but how big of a role does the global economy play in this decision-making process? In other words, how much does the global economy weigh when the Fed is making decisions for the domestic economy?

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]]> By: Helen http://welkerswikinomics.com/blog/2008/03/09/unemployment-down-but-more-people-out-of-work/comment-page-1/#comment-4456 Helen Sat, 15 Mar 2008 01:50:17 +0000 http://welkerswikinomics.com/blog/2008/03/09/unemployment-down-but-more-people-out-of-work/#comment-4456 Relating this to the other blog post that I just read, the one about the impact on global inflation of American interest rate cuts, I am wondering if Mr. Bernanke takes into consideration the implications on the global economy when he makes decisions about monetary policy. I know he is trying to find the optimal "middle road" of monetary policy for America that will neither drive up inflation too much as a side effect nor exacerbate unemployment, but how big of a role does the global economy play when Mr. Bernanke makes a decision? Relating this to the other blog post that I just read, the one about the impact on global inflation of American interest rate cuts, I am wondering if Mr. Bernanke takes into consideration the implications on the global economy when he makes decisions about monetary policy. I know he is trying to find the optimal "middle road" of monetary policy for America that will neither drive up inflation too much as a side effect nor exacerbate unemployment, but how big of a role does the global economy play when Mr. Bernanke makes a decision?

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]]> By: Angel Liu http://welkerswikinomics.com/blog/2008/03/09/unemployment-down-but-more-people-out-of-work/comment-page-1/#comment-4446 Angel Liu Tue, 11 Mar 2008 21:20:49 +0000 http://welkerswikinomics.com/blog/2008/03/09/unemployment-down-but-more-people-out-of-work/#comment-4446 I wonder if an expansionary monetary policy an expansionary fiscal policy are similar in which the Fed can use all three tools of monetary policy: buying securities, lowering reserve ratio and discount rate. Thus it can avoid a great increase in interest rate and inflation. Because when the Fed lends loans money to commercial banks, it increases the money supply, which then decreases interest rate. Similarly, when commercial banks have more more excess reserves due to lower reserve rate, commercial banks can lend more money out and create an even greater money supply. I wonder if an expansionary monetary policy an expansionary fiscal policy are similar in which the Fed can use all three tools of monetary policy: buying securities, lowering reserve ratio and discount rate. Thus it can avoid a great increase in interest rate and inflation. Because when the Fed lends loans money to commercial banks, it increases the money supply, which then decreases interest rate. Similarly, when commercial banks have more more excess reserves due to lower reserve rate, commercial banks can lend more money out and create an even greater money supply.

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