Understanding Supply-Side Economics
Posted: January 26, 2010 Filed under: Economics 2 Comments »
In understanding Supply-Side Economics, one should know its history. Better known as Reagonomics since it was espoused by Ronald Reagan, trickle-down economics or supply-side economics is the main reason why governments give large tax cuts to investors and corporations. According to Supply-Side Economics, to pump prime the economy, one has to give tax cuts since the money saved by these companies or these investors will eventually “trickle down” to the people and the people will have more buying power.
This macroeconomic theory has three pillars, one is tax policy, the second is regulatory policy and the third is monetary policy. The idea behind these pillars is supply of either goods or services. Supply, being the most important determining factor for economic growth, according to this theory, should be increased instead of increasing demand first. This theory somehow contradicts the law of supply and demand and the exact contradiction of the Keynesian theory which focuses itself on the demand in the market.
According to the Keynesian Theory, the biggest economic driver is demand and not supply. Supply-siders however would say that those who produce goods or render services and their willingness to create these goods and services are key determinants in how the market works. But isn’t it that the price of goods usually go down when there is too much supply? According to supply-siders, supply-side economics can set the pace for a country’s economic growth. Period. For those who really want to understand the crux of this theory, one should read more books about it.
What is Economics?
Posted: January 26, 2010 Filed under: Economics | Tags: Economics Leave a comment »What is Economics? To put it simply, economics is how countries choose to use their resources and this include time, effort and talent that we all have. Aside from that, economics also makes use of land, buildings, tools and equipment and of course knowledge and know-how.
Important choices should be made when it comes to the economy i.e. how much time should be devoted for work, for school and for leisure. The government also plans on how much money should be spent on a certain sector and how much money should be saved. Economics is not purely about finance, basically, the study is about goods and commodities traveling from one place to another and how those goods and commodities can strengthen a nation’s economy.
Economics is a merge of many fields, from politics, to technology to the society itself. A very popular definition of economics was written by Alfred Marshall, the author for “Principles of Economics; An Introductory Volume”. The book, released in 1890 said that “Economics is the study of people in the ordinary business of life.” While this may be a very simplistic definition, this on its own is a good definition of what Economics really is.
Lionel Robbins said that “Economics is the science which studies human behavior as a relationship between given ends and scarce means which have alternative uses.” While Paul A. Samuelson the writer of the book “Economics” printed in 1948 said that “Economics is the study of how societies use scarce resources to produce valuable commodities and distribute them among different people.”
History of Supply-Side Economics
Posted: January 26, 2010 Filed under: Economics | Tags: Economics Leave a comment »
The history of Supply-Side Economics roots in the 70s as a response to the Keynesian economic policy failure. This macroeconomic thought argues that a government can facilitate the growth of an economy by lowering the barriers in the production of products and services. By lowering the barriers, this would mean tax cuts. Keynesian macroeconomics on the other hand is the theory’s direct contrast because it focuses mainly on demand as compared to Supply-Side Economics’ focus on supply.
The term was coined by a journalist in 1975, a few years after the oil crisis in the year 1973. The theory is not as new as it seems though because it was traced back to early economic thinkers. Among these thinkers are Ibn Khaldun, Adam Smith, David Hume, Jonathan Swift, and Alexander Hamilton.
The crux of the theory is to supply more goods to have more demand for other products. In 1978 the journalist who coined the term “Supply Sided Economics” published his work entitled “The Way the World Works”. The book laid out the ins and outs of the theory along with detailing high tax rates and progressive income tax systems in the US. Apart from that, the book also dwelled on the politics of it all i.e. Nixon’s monetary policy. Basically, the journalist advocated lower taxes.
In the year 1983, economist Victor Canto published his book on “The Foundations of Supply-Side Economics” focusing on the fundamentals and foundations of the theory. Canto promised long term results of the theory but the younger generation of supply-siders are promising short term ones.
Effects of Supply-Side Economics
Posted: January 26, 2010 Filed under: Economics | Tags: Economics, Supply-Side Economics Leave a comment »What are the effects of supply-side economics? The term is utilized in two ways. Some economists use “Supply-Side Economics” to refer to supply or production underlying living standards and consumption. According to these economists, in the long term, the income levels of people will be able to reflect a certain country’s ability to manufacture goods and render services. In essence, if you want higher income and a high standard of living, you would have to increase your output. Economists who believe that this can happen are called “supply siders”. But what are really the effects of supply-side or trickle-down economics. To be very clear, if the government approve tax cuts to big corporations, the money saved will trickle down to the corporation’s workers i.e. the saved money will be evenly divided to appear on their paychecks. Once these employees have more money, they will be spending more on commodities and other items which in turn will pump up the economy a notch. This however is something that should be given much thought to because this only operates when “all things remain equal”.
Tax cuts do not necessarily mean higher pay for workers because the money saved from these tax cuts can be used for something else. The theory may look good from afar but no one can actually isolate the impact of such a practice. There are many effects of supply-side economics but are these effects something that economists can prove? Supply-side economics may have good effects to the economy but the debate on whether it actually works is still a hot topic.
Economics of World Countries
Posted: January 26, 2010 Filed under: Economics | Tags: Countries Economics, Economics, World Leave a comment »Economics of world countries is a very sensitive topic because one has to deal with a lot of political and societal factor to get to the crux of every economic situation. No matter which country you look at, the politics and how its society operates are very important factors that affect the market as a whole.
The world economy did not look good in 2009 and at the onset of 2010, the world economic situation has not yet improved. The status of the world economy can be seen through the demands in shipping and trucking different kinds of goods and commodities. If there are not many businesses seeking the service of trucking and shipping companies, this only means that trade is not as profitable compared to years before.
The situation of the trucking and shipping industry is a good economic indicator. In China for example, there is a lot of traffic when it comes to export –this means that the said country is sending out goods to be delivered to different ports. For a country that has a lot of traffic in its ports because of imports, these economies can still afford to buy something from outside the country without being decapitated. The more goods flowing in and out of a nation means that business is very much alive but if the traffic is lessened, this on its own determines that business is a bit slow.
Another indicator is the closing or shutting down of shops, be it a furniture store or a service-centered type of business –if many businesses close shop, this simply means business owners are going broke and cannot break even anymore.
Definition of Supply Side Economics
Posted: January 26, 2010 Filed under: Economics | Tags: Definition, Economics, Supply-Side Economics Leave a comment »People who are studying economics in general may come across the definition of supply side economics. Supply side economics is more popularly known as trickle-down economics. This economic theory basically says that when you reduce taxes, you will be stimulating the economy’s growth. How does this happen? This happens through increased spending of consumers and over the time, will aid the growth of an economy.
An income tax cut given to a corporation or a company may mean more money for this corporation’s employees. Trickle-down economics however does not really happen when applied in certain countries because the money saved from the tax cut can still be routed to other things. But in the purest sense, and if all things work as they should, Supply Side Economics is a reliable model.
Going back to the tax cut, once this tax cut is implemented and companies give their employees a raise –these employees will be buying more from the market. This means demand for certain commodities and products will increase and this in turn will lead to growth in the market and later on will lead to more employment opportunities.
This theory however is very utopian and there is not much evidence for us to see if it really works. Many economists disagree that trickle-down economics works at all because there are many factors that can affect the market and it is not only tax cuts that affect it. To isolate its impact is impossible but the results could be very satisfying if done the correct way.
What is Computer Engineering?
Posted: January 26, 2010 Filed under: Engineering | Tags: Computer, Engineering 3 Comments »
What is Computer Engineering? Computer Engineering is a type of engineering that deals with computer software and hardware. Lessons on electrical engineering are also a part of the study, making computer engineers a highly specialized type of engineering. In 1971, the very first degree program on computer engineering in the United States was established and the profession has enjoyed a popularity equated to civil engineering since then.
Those who want to be computer engineers need to learn about algorithms, computer architecture and organization, computer networking, computer systems engineering, circuits and signals, database systems, digital logic, electronics, digital signal processing, embedded systems, human-computer interaction, operating systems, interactive systems engineering, programming fundamentals, software engineering among other subjects.
But what do computer engineers do? Computer engineers research, do the design for either hardware or software and then concentrate on its development and tests. Sometimes, when producing hardware, computer engineers have to supervise the manufacturing and installation of specific types of hardware.
Computer hardware engineers in particular supervise how products such as computer chips, keyboards, circuit boards and computer systems are manufacture. They are the ones who make sure that everything works perfectly. Without computer hardware engineers, your computer might not be working as good as it does today.
But why be a computer engineer? Being a computer engineer is not a desk job. In fact, you can be part of a positive change in terms of technological advancements. You can also make use of your talents in making a big difference in the world of communication, while you are being paid. There are lots of perks to being a computer engineer so if you are interested in taking this course, go right ahead.
Types of Civil Engineering
Posted: January 26, 2010 Filed under: Engineering | Tags: Civil Engineering, Engineering 2 Comments »
There are different types of civil engineering. The sub-disciplines are not as popular as civil engineering itself but these types of civil engineering are equally important. Civil engineers do not only have one career path, those who specialize on a certain sub-discipline do different types of work and it ranges from coastal engineering to water resources engineering.
Coastal engineering is one type of civil engineering and is concerned with the management of coastal areas. Coastal engineers make sure that flooding does not happen in coastal towns along with erosion caused by rains and flashfloods.
Construction engineering is another type of civil engineering and it involves site development, transportation, hydraulic, environmental, geotechnical and structural planning and execution. Most construction engineers focus on the business nature of civil engineering, they make sure that logistical operations are in order and they draft and review contracts so mistakes are prevented or lessened.
Another type of civil engineer is the earthquake engineer. This type of engineer makes sure that structures can withstand hazardous earthquakes. An earthquake engineer is a more specialized kind of structural engineer with the main objective of lessening the possibility of earthquakes destroying buildings or structures. Earthquake engineers foresee what happens to structures during earthquakes and try to design buildings that can cope with such disasters.
Environmental engineering, another subcategory of civil engineering deals with the remediation of contaminated areas.
Other subtypes of civil engineering include geotechnical engineering, water resources engineering, materials engineering, transportation engineering, and municipal or urban engineering among others.
Structural Engineering Basics
Posted: January 26, 2010 Filed under: Engineering | Tags: Engineering, Engineering basics, Structural, Structural Engineering Leave a comment »If you want to be a civil engineer or an architectural engineer, it would be very useful for you to know structural engineering basics. You can very well learn this in school but knowing more than what your teachers or professors teach you will be very useful as well.
Structural analysis is important to create a cost-effective and sturdy structure. Apart from this course, you should also learn about the history of architecture. After all, learning from the past will teach you not to make the same mistakes as engineers in previous times did.
Learning structural engineering basics is fundamental not only to engineers; it comes in handy for people without an engineering degree as well. Backyard landscapers for example, need to learn structural engineering basics. Anyone planning to remodel a room in their house or apartment will benefit from learning the basics of this study as well.
Structural engineering basics can be found in history as well. One great example is the Egyptian pyramids. This knowledge can also be found in earlier buildings as well so it is important to study history to learn the fundamentals in a fun way.
Structural engineering enables engineers to design structures. Aside from that, it also helps them make sure that the structure they will be constructing is safe and can withstand all types of weather conditions and wear and tear.
Earthquakes, flooding and other natural disasters should also be considered when designing a building so before you can start designing, you should learn the basics first.
Different Types of Engineering Fields
Posted: January 26, 2010 Filed under: Engineering | Tags: Engineering, Engineering Fields Leave a comment »
There are different types of engineering fields and this in its own makes it hard for people who want to be engineers to choose which field is best for their abilities. According to experts, this decision should be easy especially if you are interested in a certain type of study. If you are fascinated with genetics then biological engineering should be your first choice. For those interested in the environment, you can study to be an environmental engineer.
The most common type of engineer are the civil engineers, they are the ones who build roads and bridges but today, a great number of computer engineers are enjoying quite a popular status.
There are however other types of engineering i.e. aerospace, architectural, industrial, agricultural, metallurgical, and chemical among others. Choosing which type suits your interests is very important so you will succeed in the field. If you choose the wrong kind of engineering course, you might be shifting from one course to another. To prevent this, determine which interests you most and which one brings out the best in you.
Being an aerospace engineer for example mean you have to deal with the creation, design, and testing of planes, missiles, helicopters, satellites and even spacecraft. So if you dream of becoming a rocket scientist, then this is the course for you.
If you are interested in designing tall structures, you can go into architectural engineering. Architectural engineers are very much needed nowadays especially in towns or cities that are currently developing their buildings.
