http://www.nytimes.com/2010/01/14/business/economy/14econ.html?ref=business
This article is obviously a little optimistic about the future of the economy. The "C" and "I" portion of the National Income Accounting Identity (Y=C+I+G+NX) is mentioned in this article, as consumer spending and home sales are slowly increasing. Demands for loans remain low however, and possibly have declined in some cities.
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ReplyDeleteThis article states that recovery will be slow and hesitant, but that there will be an increase in growth. However, from what I could tell, most of the growth talked about in this article has come and will continue to come from government support. The article discusses increases in home sales, but that the increases were caused by tax incentives for first time buyers and were concentrated in lower priced homes. The article also discusses how some of the increase in sales of cars was due to the cash for clunkers program. If a good portion of growth is coming from government spending, then should we really take this growth as a sign that the economy is recovering? Isn’t the growth misleading since without the government stimulus, it wouldn’t be occurring? After all, the article states that unemployment has remained at 10% and that unemployment will probably not be improving any time soon.
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