Question about Economics.

Economics Economics Questions
1

This is probably the only site on the Web that I have found concerning economics that might be able to answer my question.

Kenyan Multiplier= 1/1 {1-MPC} or 1/MPS

basically I need help finding statistical information that can help me find MPC and MPS. I am thinking that MPS is disposable income-personal consumption expenditure, and i am basing this off of the fact that DI-PE=savings.

Also I would like to know the output gap at the beginning of this recession, and I would like this number to be expressed in dollars and not percentages.( for example 12 trillion or what not). If you cant find the number than please tell me how I can convert a CBO percentage estimate into number such as X trillion.

Thanks.

2

Is this for an assignment? If so, what a horrible assignment.

3

I have a hard time with this so any help would be useful.

4

I’m sorry but are you talking about the Keynesian multiplier?

5

yup.

This is the only site on economics that can offer feed back to questions.

6

You cannot answer those questions with exact figures, as any answer would be arbitrary.

7

I understand that their may be some objections but i am just wondering if you could provide a good answer. Right now I am using household consumption which was estimated to have fallen by 12 trillion…

in economics most things are like estimates.

8

I understand but i am looking for a good answer,and most numbers in economics are estimates.

9

OK going by what I see in Man, Economy, State on page 866,

Social Income = Consumption + Investment.

There is an example in the book which I think will help. Not a economist but I hope it helps.

10

IT would be a huge help if simply could just find out what the out put gap was at the start of this recession.

11

Like I said, not an economist. However, you could email Dr. Robert Murphy. He would definitely know the answer to your question. Just explain your situation and I’m sure he would be happy to pass on his knowledge.

12

You won’t find many Keynesians here; I’m certainly not one, so you should take my conjectures with several grains of salt, but since it sounds like we’re your last resort, I’ll take a stab.

For MPC, I’m guessing you might be able to use data from the BLS’s Consumer Expenditure Survey to try to gauge the change in consumption for any given period. Then you could use data from the BEA’s Personal Income stats in combination with IRS data to try to gauge the change in disposable income for the same period. Then you could divide the first number by the second and call that the MPC. Then you could subtract that from 1 and call the difference the MPS.

As for an output gap in dollar terms, I’m assuming that if you know the gap in percentage terms and you know the relevant actual GDP, then you can use basic algebra to find the alleged “potential GDP” that was used to calculate the percentage using the formula (actual GDP - potential GDP) / actual GDP = output gap percentage. Just plug in the known values and solve for potential GDP. Once you know that, subtract potential GDP from actual, and there’s your output gap in dollar terms.

Or you could drop whatever class you’re taking, pick up a copy of Human Action by Ludwig von Mises, and start learning economics for real. [:D]

Good luck.

13

Yeah I was thinking of doing that but it is just frustrating.

I have already enough of Mises and Rothbard.

14

Thanks for verifying my answer. Also here’s a piece I wrote about Keynesianism, in case you’re interested.