domingo, 6 de septiembre de 2009

Market evolution. Jorge de Lalama. Chapter IV. General Theory of Employment, Interest and Money. Keynes. Part I.

Changes of view regarding the future are capable of influencing the amount of occupation, depending on the interplay of supply and demand.

When nominal wages rise in real wages fall by phenomena linked to production and employment. By raising wages and prices rise in real wages is smaller, with lower consumption, decreasing production and increasing unemployment produced the opposite effect, ie lowering wages, prices fall, real wages being higher.

The reduction in payrolls has indirect consequences on the banking system and credit status.

Any individual or group of individuals who consents to a reduction in wages in relation to others, will suffer a relative decline in real wages.

An increase in employment can only happen accompanied by a decline in real wage rates, prices have come down.

Prices falling real wages rise, increasing profits. The greater the work unit, the scale of employment will be higher and prices will rise.

As it grows, the prices increase and employment decreases occupation.

The employer takes into account:

a) Cost of the factors of volume occupancy.

b) Cost of use because of occupancy rates (amount paid by other employers).

c) Income of the employer. Surplus of production over a and b.

There must be some level of investment sufficient to absorb the excess of total production.

The consumption depends on the level of overall income and hence the level of employment, except where any changes occur in the propensity to consume.

The scale of employment depends on the function of the overall package, the propensity to consume and investment volumende.

The economic system may find itself in stable equilibrium with employment at a lower level of full occupancy.

The richer the community, the larger will the distance that separates the real production potential, the effects will be more egregious on the economic system, and therefore the opportunities for new investments are less attractive unless the rate is lower fairly quickly because a poor community will be prone to consume most of their production, so that a modest investment will sificiente to achieve full occupancy.

If output increases, a firm has to take work less and less effective for its purposes particilares wage paid per unit, only one factor among others leads to diminishing returns the use of equipment producer, in terms of production as used more work. These work units available are increasingly adapting the use of a homogeneous producing equipment. Therefore, if there is no surplus of skilled labor or skilled and less use of adaptive means higher cost of labor per unit of production, this means that the rate at which computer performance decreases as you increase the occupancy , is faster than it would if any such excess.

The employer makes a expecttiva or foresight on what consumers will pay when you are ready to supply them. Expectations may be short term or long term.

A change in expectations, will only produce its full effects on the occupation in a considerable period.

Past expectations have not yet developed are incorporated in the current production team, with reference to which the employer has to make these decisions.

Producers base their expectations on the assumption that the most recent actual results will continue, except that there are compelling reasons to expect a change.

In durable goods, short-term expectations of the producer are based on current expectations of long-term investor and is in the nature of long-term forecasts that can not be revised at short intervals in the light of the results.

The income of the entrepreneur is the surplus value of its finished products and sold during the period, on its prime cost. Therefore, the income from the rest of the community is equal to the cost of factors of the entrepreneur.

Saving means the excess of income over consumption expenditure.

Investment is an asset purchase old or new, by an individual or a society.

The employer sets the volume of employment (and consequently, the production and real income) driven by the desire for maximum profit and future (given the cost estimate for use by their point of view, on how to use the computer to give maximum performance throughout the life of it), while the occupying volomen produce this maximum profit depends on the total demand function resulting from their expectation about sales proceeds resulting from consumption and investment.

The expectation of an increase in investment preponderant on savings will induce employers to increase the magnitude of those.

The scale of employment is determined by effective demand forecasts made by the employer, being a criterion for an increase in the expectation that demand a relative increase of investment on saving.

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