arnoldus
1 december 2008, 16:49
Aangezien hij in de jaren '70 de crisis nauwkeurig voorspelde, en goede opmerkingen maakte rond de gevolgen van Irak geef ik dit mee:
...as soon as the economic crisis is over. OK, that will thus be around 2020. What a naivety. I am a professional econometrician, specialised in economic forecasts. The actual crisis is not a cyclical one, it's a persistent structural one. It's the fourth crisis of capitalism since we left the free competition as dominating market form for oligopolisme and monopolisme. The first was in 1904 and took until 1918; the second was in 1929 and took until 1945 (except in Germany where the crisis was over in 1938). The third started with the fuel crisis of 1976 and lasted until 1987. All those crises had that in common: the market equilibrium was lost due to exogenous shocks: in 1904 that was the changed market form and back harvests, in 1929 it was the financial crisis, in 1973 the petroleum crisis, now again the financial crisis. After an exogenous shock the market doesn't return to its equilibrium position but is farther away from that point. That's divergent growth. When such happens purchasing power goes down and enterprises try to undo the overproduction on the world market. However, to win the battle for the world market the wage costs per unit of output need be as low as possible. Despite the fact that labour is relatively cheaper than capital, enterprises don't buy more labour force, no, they buy more capital to increase their productivity. That results in more unemployment, decreasing purchasing power, more overproduction: the start of a new cycle. I calculated with my Moneytron III econometric model that the actual crisis will last at least twelve years.
...
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WHAT TO EXPECT FROM THE ECONOMIC CRISIS?
As I told earlier my job is essentially to build econometric models, allowing to make short-range and mid-range forecasts of the economic situation concerning economic growth, inflation, unemployment, interests, public dept, purchasing power, etc. An econometric model is a set of statistical and mathematical equations explaining such used endogenous variables as GNP, gross investments, private consumption, public consumption, employment, wages, savings, etc?, but also unemployment, purchasing power, economic growth, etc. Those endogenous variables are explained mathematically in terms of other endogenous variables and of exogenous political variables (e.g. the tax rate, the social costs, the subventions, social help, etc.) Those political (exogenous) variables are easily to forecast. The more those forecasts are correct the closer the forecasts of the endogenous variables (always conditional on line forecasts) will be correct.
Very important is the study how the market reacts upon exogenous shocks (e.g. the actual financial crisis in the world having evaporated billions of dollars and having reduced the global purchasing and investment power). Econometricians perfectly know how to study if a situation, after an exogenous shock, the market returns to general equilibrium rather to diverge from that equilibrium. In cyclical crises the model of an economy tends to a less or more convergence to equilibrium. In times of structural crisis the model tends to diverge period after period from general equilibrium.
A strong method to analyse the situation of an economy for which an econometric model was built is the analysis of the matrix of impact multipliers. Impact multipliers learn what will be the effect on all endogenous variables if a concrete exogenous variable changes (e.g. the credit capacity of the banks). If a model counts 128 endogenous variables (as my Moneytron III model for the USA) and 24 exogenous variables, then with each exogenous variable there corresponds a row of 128 impact multipliers. One can construct 24 such rounds what results in a matrix of 24 x 128: the matrix of impact multipliers. Econometricians discovered that a model tends to diverge from global equilibrium if the highest Eigen value (all or not a complex figure) corresponding with the matrix of multipliers is in absolute value higher than one. Only if all Eigen values corresponding with the matrix of impact multipliers are all in absolute value lower than one, a model tends to converge towards global market equilibrium.
Applied to my Moneytron III model I was worried already in 2006 that several Eigen values corresponding with the 1950-2006 version had a different sign and were in absolute value higher than one. That let understand that the complete economic situation in the States was already extremely vulnerable in 2006. For the 1950-2007 version the situation worsened, letting the assumption become true that the American economy was by the end of 2007 already closer to a persistent structural economic crisis than to a simple short cyclical crisis. The model predicts that even if Obama could make true his elections promises, unemployment will raise in five years by more than 5,000,000, that overproduction will be multiplied by a factor 12, that the erosion of private purchasing power will be more than 18 % over five years. Those figures were even not reached during the structural crisis of monopoly capitalism in the period 1973-1986. Such figures were only found during the structural crisis of 1929-1945. ...
uit: http://www.imca-slotracing.com/EdiNew.htm
...as soon as the economic crisis is over. OK, that will thus be around 2020. What a naivety. I am a professional econometrician, specialised in economic forecasts. The actual crisis is not a cyclical one, it's a persistent structural one. It's the fourth crisis of capitalism since we left the free competition as dominating market form for oligopolisme and monopolisme. The first was in 1904 and took until 1918; the second was in 1929 and took until 1945 (except in Germany where the crisis was over in 1938). The third started with the fuel crisis of 1976 and lasted until 1987. All those crises had that in common: the market equilibrium was lost due to exogenous shocks: in 1904 that was the changed market form and back harvests, in 1929 it was the financial crisis, in 1973 the petroleum crisis, now again the financial crisis. After an exogenous shock the market doesn't return to its equilibrium position but is farther away from that point. That's divergent growth. When such happens purchasing power goes down and enterprises try to undo the overproduction on the world market. However, to win the battle for the world market the wage costs per unit of output need be as low as possible. Despite the fact that labour is relatively cheaper than capital, enterprises don't buy more labour force, no, they buy more capital to increase their productivity. That results in more unemployment, decreasing purchasing power, more overproduction: the start of a new cycle. I calculated with my Moneytron III econometric model that the actual crisis will last at least twelve years.
...
---
WHAT TO EXPECT FROM THE ECONOMIC CRISIS?
As I told earlier my job is essentially to build econometric models, allowing to make short-range and mid-range forecasts of the economic situation concerning economic growth, inflation, unemployment, interests, public dept, purchasing power, etc. An econometric model is a set of statistical and mathematical equations explaining such used endogenous variables as GNP, gross investments, private consumption, public consumption, employment, wages, savings, etc?, but also unemployment, purchasing power, economic growth, etc. Those endogenous variables are explained mathematically in terms of other endogenous variables and of exogenous political variables (e.g. the tax rate, the social costs, the subventions, social help, etc.) Those political (exogenous) variables are easily to forecast. The more those forecasts are correct the closer the forecasts of the endogenous variables (always conditional on line forecasts) will be correct.
Very important is the study how the market reacts upon exogenous shocks (e.g. the actual financial crisis in the world having evaporated billions of dollars and having reduced the global purchasing and investment power). Econometricians perfectly know how to study if a situation, after an exogenous shock, the market returns to general equilibrium rather to diverge from that equilibrium. In cyclical crises the model of an economy tends to a less or more convergence to equilibrium. In times of structural crisis the model tends to diverge period after period from general equilibrium.
A strong method to analyse the situation of an economy for which an econometric model was built is the analysis of the matrix of impact multipliers. Impact multipliers learn what will be the effect on all endogenous variables if a concrete exogenous variable changes (e.g. the credit capacity of the banks). If a model counts 128 endogenous variables (as my Moneytron III model for the USA) and 24 exogenous variables, then with each exogenous variable there corresponds a row of 128 impact multipliers. One can construct 24 such rounds what results in a matrix of 24 x 128: the matrix of impact multipliers. Econometricians discovered that a model tends to diverge from global equilibrium if the highest Eigen value (all or not a complex figure) corresponding with the matrix of multipliers is in absolute value higher than one. Only if all Eigen values corresponding with the matrix of impact multipliers are all in absolute value lower than one, a model tends to converge towards global market equilibrium.
Applied to my Moneytron III model I was worried already in 2006 that several Eigen values corresponding with the 1950-2006 version had a different sign and were in absolute value higher than one. That let understand that the complete economic situation in the States was already extremely vulnerable in 2006. For the 1950-2007 version the situation worsened, letting the assumption become true that the American economy was by the end of 2007 already closer to a persistent structural economic crisis than to a simple short cyclical crisis. The model predicts that even if Obama could make true his elections promises, unemployment will raise in five years by more than 5,000,000, that overproduction will be multiplied by a factor 12, that the erosion of private purchasing power will be more than 18 % over five years. Those figures were even not reached during the structural crisis of monopoly capitalism in the period 1973-1986. Such figures were only found during the structural crisis of 1929-1945. ...
uit: http://www.imca-slotracing.com/EdiNew.htm