Americans Tighten Their Purse Strings Live

The wisdom of the world, reflecting among other things, they can not always like to understand the suffering of vacuum imposed their own scapegoat. Those strange, distant and far away or because the crowd seems strange or organization that is of best candidates. Both for the Chamber of Secrets suspense conspirators imagination, or more practical significance of the blame on other countries, when not staged. If you just can blame these people also abhorrent to imagine a peaceful and happy living a life of blame and accusations that the more levels will be soaring to the lush.

Poor U.S. economy recovery, along with the extremely weak employment growth, so that the unemployment rate still remains high at 9.6%. One is the people, especially the Democratic Party, the object of censure, are those pursuing a mercantilist policy, the accumulation of a large number of surplus countries. They are considered to unfair trade “stolen” the jobs Americans. As a counter of the Road, they called for government efforts to increase exports, reduce trade deficit.

While trying to promote exports in the right direction, our research has found that it is not sufficient to bring the Americans needed employment paradise. Our research shows that in the future, Americans will be disappointed to find, along with the U.S. trade imbalance to correct, the U.S. will have to endure a high percentage of unemployment.

Reasons for unemployment

Of unemployment, economists thought for a long time. The existence of involuntary unemployment is Keynesian point of major concern is the macroeconomic and reform the center of the controversy. The traditional theory, in particular, to deny the existence of involuntary unemployment in the New Classical theory, at this point does not provide satisfactory answers. Some theoretical progress, such as efficiency wage theory in an attempt to weaken the basis of the traditional idea of market clearing assumptions and contradictions between involuntary unemployment. But the theoretical study of the list-style limited thinking, given the model does not explain the actual situation.

We believe that the consequences of unemployment is business failure. When a company set up a time when it will comply with industry practice, hiring employees, pay wages. This wage is the industry’s trade practice under the recognized and accepted by staff of the standards. When this enterprise defeat in the competition when it had to cut production or bankruptcy of business, the inevitable consequence of increased unemployment. From the industry level, the company failed deposit lag exists from the industry that the industry employs more than the number of sales in the market, the productivity capacity of the corresponding number of employees. If the deposit lag the industry appears competitive investment under its extrusion, was out of production capacity will inevitably lead to staff dismissal.

Discuss why there is unemployment, that is, why did not discuss the economy, there is an automatic power, declining unemployment; or why the unemployed population in reducing its own payroll requirements, still can not find work. Answer is that unemployment is a delay from the storage industry generated. Stagnation in the storage industry, market demand, the industry’s total production capacity constraints, it decided to match production capacity with the number of employment. Even if the unemployed person is willing to accept lower wages, business is still not a rational decision to hire more staff. In fact, enterprises face of this situation there are two options: one option is to order production of supporting employment and manpower, and pay them higher wages. Second, hire more staff to maintain the same yield, and pay them lower wages. Legal, social, management efficiency, staff morale, decision-making flexibility considerations will support enterprises to choose the first option and not the second.

Why is that traditional theories for the unemployed is not valid? According to the traditional theory, the labor market supply and demand curves determine the market clearing point. If there is unemployment, then wages can increase the demand down to reduce supply, thereby clearing the market. U.S. economist Minsky’s rebuttal is that when wages fall, when demand for the product will decrease, and thus can not accommodate more employment. And we believe, there is no unified labor market. Determined by the demand of employment. Even if the lower wages lag the industry can not be converted to lack of storage industry. That is, lower wages and can not effectively raise the demand for labor. The key point is not, as Debreu economy, as envisaged by the list form, the labor market is not Apple’s market. The purchase of labor is to enter production, but the production itself has a complex structure. The characteristics of the decision, we should be thinking from structuralism to study the economy.

High unemployment

This theory under consideration, we can understand why the international trade deficit is conducive to employment growth. Expansion of international trade deficit, the U.S. imports more than exports, on behalf of domestic demand, a large number of international capital into the U.S.. This has kept the industry to avoid the severe lag out to create the conditions of employment. Therefore, employment growth is positively correlated with the trade deficit.

The relations between our rigorous quantitative analysis confirmed. Our study also showed that, in addition to the international trade deficit, the job also affected industrial production, the positive effects of production efficiency, and by the risk of overflow of the negative impact. High risk of overflow at this stage the United States, is not strong willingness to invest, trade deficit narrowed, leading to delays in employment growth is difficult to recover. Core Tip: Research shows that in the future, Americans will be disappointed to find, along with the U.S. trade imbalance to correct, the U.S. will have to endure a high percentage of unemployment.

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Category: Business
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