[Fwd: Two zone acceleration effect]

[Greg Nowell <GN842@xxxxxxxxxxxxxxxxx>]

O'donnell's comments were wholly off-base, not to
mention condescencing, on my query on this point
insofar as they engage the whole of terminology
employed by economics, including Keynesians.  It's not
my fight. His answer also does not address my
question.  I'm also not interested in always engaging
someone who has a total system to defend and who views
everything within the larger context of trying to
defend his total system.  So I'm putting O'donnell on
my personal system's filters and hope he does the same
to me.  We can mutually cease to exist for one another.

Following is the response of Keynesian economist
colleague and collaborator  in Paris.  The French
doesn't need translation as the answers on the
point-by-point are in English.   I'm surprised this
topic does not arouse more interest among the
economists on the list.

--
Gregory P. Nowell
Associate Professor
Department of Political Science, Milne 100
State University of New York
135 Western Ave.
Albany, New York 12222

Fax 518-442-5298

--- Begin Message ---

• To: Greg Nowell <GN842@xxxxxxxxxxxxxxxxx>
• Subject: Re: Two zone acceleration effect
• From: ventelou <bruno.ventelou@xxxxxxxxxxxxxxxxxxx>
• Date: Thu, 03 Jun 1999 14:14:40 +0200
• Original-recipient: rfc822;GN842@CNSVAX.Albany.Edu

La consommation interne est très inerte, aisément prévisible, etc.. Plus un
pays fait reposer sa croissance sur des éléments comme l'investissement, ou
les exportations, plus il sera sensible aux chocs conjoncturels.

On peut dire ça indépendamment même de la théorie macro (keynésienne ou non
keynésienne).

So :
1 Yes
2 Yes if there is a shock, a perturbation (but "No", if we consider a
stationary economy)
3 Yes
4 Yes, a big one.

-----Message d'origine-----
De : Greg Nowell <GN842@xxxxxxxxxxxxxxxxx>
À : pkt <pkt@xxxxxxxxxxxxxxxx>; bruno ventelou
<bruno.ventelou@xxxxxxxxxxxxxxxxxxx>
Date : jeudi 3 juin 1999 00:53
Objet : Two zone acceleration effect


>Consider investment as a component of aggregate
>income.  Assuming some arbitrary measure of GDP,  the
>situation in case no. 1 might be
>
>Y = I + C or, in geographic zone #1,
>100= 20 + 80.
>
>No consider zone #2
>Y=I +C
>or 100=50+50.
>
>Zone #2 exports heavily to zone #1.  Zone #1's growth
>is steady but does not provide enough growth in
>consumption to outpace Zone #2's acceleration effect.
>
>1.  Would it not be the case that zone #2 would be more
>prone to imbalances attributable to the "acceleration
>effect" than zone #1, lacking as it were, its own
>component of "stabilizing demand"?
>
>2.  Would it imply geographic disparities in employment
>based on the distribution of consumption?
>
>3.  Would it imply that the value of assets (and by
>implication the liquidity of the banking system) be
>more volatile in the zone with the higher dependency on
>investment as a component of Y?
>
>4.  Is it a possible explanation for an Asian
>super-boom which lasts about 15 years and then goes
>superbust?  A small part of explanation or a big one?
>
>--
>Gregory P. Nowell
>Associate Professor
>Department of Political Science, Milne 100
>State University of New York
>135 Western Ave.
>Albany, New York 12222
>
>Fax 518-442-5298
>
>

--- End Message ---