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2014-05-21

Accelratorn Varför är den bortglömd. Det var Basics, vill jag minnas.

To have more or less full employment, we need sufficient spending to make use of the economy’s potential. 
But one important component of spending, investment, is subject to the accelerator effect: the demand for new capital depends on the economy’s rate of growth, rather than the current level of output. 
So if growth slows due to a falloff in population growth, investment demand falls — potentially pushing the economy into a semi-permanent slump.
Now, you could say that this should be easy to deal with; just reduce the interest rate sufficiently to sustain investment demand despite population slowdown. 
The problem is that the required real interest rate on safe assets may end up being negative, and is therefore achievable only if we have sufficient inflation — which runs into an ideological commitment to price stability.
Paul Krugman 19 May 2014
http://krugman.blogs.nytimes.com/2014/05/19/demography-and-the-bicycle-effect/?_php=true&_type=blogs&_r=0

Accelerator effect

From Wikipedia, 

Stabiliseringspolitik

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