TwitterGetting back on track after the spending season
A part of all you earn is yours to keep
This is the time of year when we reflect on possible seasonal excesses and think sober thoughts of cutting back, diets, etc. In the past I have mentioned variations of the dreaded 'B' word , and have provided a tool for keeping track of your spending.
Before you yawn and say 'Not again Scrooge,' let's look at finances from a fresh angle.
What does this saying mean to you? "A part of all you earn is yours to keep." (1)
Some of you may have seen the commercial of the young guy on the street where different strangers are helping themselves to money from his wallet. Eventually he is left with nothing except an old woman warning him she will be looking out for him, or more likely, his wallet.
'A part of all you earn is yours to keep.' Yet we willingly enable others to become richer and what does that do to our bottom line? It's red and thin and theirs is thick and black.
Company RRSP or Do it myself?
Here is a conversation that was posted in the finance forum before it closed.
"So basically after i get my pay cheque and decide to put my money into an rrsp, that money has already been taxed by the gov't so how does it really reduce my TI vs. having your employer take the money first to put it in a rrsp for you then taking the taxes off the rest of your paycheque?"
Job Losses for December 09 and 2009 Year All up for US and Canada
The expectations were wrong. Recovery is not imminent. Economic sentiment took another beating when labour numbers from both the US and Canada showed mounting losses across the board. The American jobless rate remained at 10%, whereas their Canadian counterparts stayed at around 8.5%. Overall, the numbers for December and last year's 2009 figures aren't good.
The bad news will make economists and markets re-think the timing of the so-called 'economic recovery' in both countries. Canada lost 2,600 jobs in December, after creating positions in three out of the four past months, Bloomberg expected Canada to create 20,000 new jobs in December.
The labour market remains 323,000 jobs below the peak hit in October 2008. Last month's job losses came after employers created 79,100 jobs in November. The bad news also suggests employers in both countries will continue to delay their plans to hire more workers. Key markets to loose in Canada were the transportation and public administration offset gains in health care and social assistance. Self-employment continued to grow, and employment among women aged 25 to 54 tumbled by 24,000. Youth joblessness continued to swell, hitting 16.1 per cent from 15.9 per cent a month earlier.
Among sectors, transportation and warehousing last month lost 24,000 jobs, and business, building and other support services posted losses of 23,000. Public administration shed 22,000 positions and finance, insurance, real estate and leasing cut 17,000 jobs in December. Factories also shed jobs.
Employment continued to climb in health care and social assistance, with 35,000 new jobs, one of the few since late 2008.
A similar story played out South of the border where job losses increased higher than expected. Read the rest of this entry »
Maximizing Your Gift Giving Returns
Deadweight Loss of Gift Giving>
Came across an interesting article that discusses Christmas gift giving from the perspective of economists. Why bother giving a $100 gift to someone who will only appreciate it at $50? There is a loss of half of a Christmas gift, can we not maximize our gift giving by taking care of that deadweight loss?
Turns out an economist has contemplated the best way to maximize gift giving and minimize deadweight loss. Check out some of the articles on the topic from UPenn and Freakonomics, and a link to the actual paper (JSTOR)
Health Care Reform: The Latest Developments in American Health Care Reform
Both the House and the Senate have passed separate versions of the new health care reform bill; online insurance quotes will be more competitive now. The Senate's version of the new health care reform bill passed with a strong 60/39 count.
New initiatives for reforming the healthcare industry will soon affect the online insurance quotes that you receive from major healthcare insurers.
President Obama's plan for American health care reform continues to gain positive ground. Last week, at 7:00 AM on Christmas Eve, when the Senate's version of the new Health Care Reform Bill went up for vote, it needed a basic majority of 51 votes to be passed - and it took only about 5 minutes to receive them. The final vote count was 60/39 in favor of passage. This impressive victory was the result of the second longest deliberation period in the history of the Senate: 24 straight days. Now, both the Senate and the House of Representatives have passed separate versions of the final Health Care bill.
Introductory Microeconomics Cost Formulas
Here is a list of some of the basic microeconomics formulas pertaining to revenues and costs of a firm. Remember when you're using these formulas there are a variety of assumptions, namely, that the the firm is profit-maximizing (making as much money as they can.)
Here are the basic formulas (work out your own algebra to find alternatives): Read the rest of this entry »
Happy New Year from DiscussEconomics
Wishing you and yours a Happy New Year! All the best in 2010. We will be here for another year adding great content to our economics and personal finance blogs, and news and articles in our econ forums.
How can Aggregate Demand and Aggregate Supply Explain GDP Movements?
When we describe GDP movements over the very long run we are concerned with economic growth over long periods of time--obviously. We use the production function with variable labour capital and technology, and consider issues such as what will change the rate of growth of output over very long periods. For this we would use the first diagram in the mid-term. The model that goes with this is AD-AS when the vertical AS curve is shifting outwards, as in Figure (b) below. Because the factors of production are increasing, the full employment level of output is increasing. Since economic growth over the very long-run averages a few percent per year, we know that the AS curve typically moves to the right by a few percent per year.
In the long run, we assume that capital and technology are fixed. Therefore, the AS curve is still vertical, but not moving, as in Figure (a). In Figure (a) we show the long run, where we assume that factors of production are fully employed but not changing, and the AS curve is vertical at the level of full employment output. Therefore, in the long run output is determined by aggregate supply alone. For a given AS curve, the price level is determined by the 'level of aggregate demand. If AD were to increase, the price level would increase, while the level of output would remain constant. This model would describe the GDP movements in the second diagram in the mid-term, where the long run growth rate is flat.
Merry Christmas From DiscussEconomics
All the moderators from DiscussEconomics would like to wish all our users and readers a very Happy and safe Christmas. Yes, we called it Christmas, you festivus poles can sit on it. 
Also, please have a Happy New Year and don't forget to bookmark DiscussEconomics for your latest Econ news and personal finance tips.
Diminishing Marginal Product of Labour
The assumption of diminishing marginal product of labour means that, in order to work more, workers must be offered a higher real wage. We can use this assumption to derive the labour demand curve.
This concept, the amount that output increases for a unit increase in labour input, is called the marginal product of labour (MPN). The MPN is given by the slope of the production function. This means that as labour use increases the amount of extra output that is gained from an increase in labour input becomes smaller. This is known as the diminishing marginal product of labour.
Given the diminishing marginal product of labour, if we graph the marginal product of labour against labour use, we would have a downward sloping curve. THis is illustrated in the figure below.
