The New Geography Of Jobs - 1882 Words

The New Geography of Jobs According to Enrico Moretti s ground breaking book, â€Å"The New Geography of Jobs,† manufacturing sector companies have been superseded in the knowledge economy by innovation sector companies. While they were once the holy grail of community planners, manufacturing sector companies are no longer the ideal economic model. One key premise of Moretti s book is that industry-focused brain hubs create thick labor markets with lots of specifically skilled workers. For example, take the software cluster in Silicon Valley, the life sciences cluster in Boston, or the financial or garment industry clusters in New York. These thick markets make it easier for a business in a targeted, innovation industry to acquire needed talent. Moreover, these brain hubs create human capital spillover as the proximity of highly specialized workers to each other helps the exchange of new and creative ideas. Additionally, the high paying jobs in innovation industries create a multiplier effect. To explain, innovative industries create a multiplier effect because for each highly paid worker, five local service jobs are needed to support them. Jobs in the service sector range from professionals, such as doctors and lawyers, to non-professionals, such as waiters and landscapers. By contrast, manufacturing jobs historically only generate 1.6 additional service jobs in the local area. Both manufacturing startups and innovation startups require large upfront investments. However,Show MoreRelatedThe New Geography Of Jobs1252 Words   |  6 Pagesnowadays have a traditional economy and they did not shift to knowledge or human capital economy. However, on the opposite side, many cities took advantage of the human capital and invested their forces to be a high-tech market. The book, â€Å"The New Geography of Jobs† of Enrico Moretti is a perfect tool that explains the reasons why this might happen. The book focuses in to explain why the â€Å"Great Divergence† which the American community is facing over the last 40 years. As some cities experience a growingRead MoreDr. Steven M. Quiring1523 Words   |  7 Pagesprofessor and graduate director in the Department of Geography at Texas AM University. As his research assistant, I felt so happy to work with such an excellent, patient, and easygoing scholar over this semester. And I was fortunate to be assigne d to interview him so as to have an opportunity to know him better. Dr. Quiring and I met at his office on Tuesday, November 17th. Due to he is one of the busiest faculty members in the department of geography, so finally we conducted a short half-hour interviewRead MoreGeography Is Not The Way For A Successful Career Opportunity1069 Words   |  5 Pages Often geography†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ is avoided by students who have decided that geosciences â€Å"a general term used to describe a wide range of specialized scientific fields within the broad areas of geology and resource management† (Clarke, Earle, and Wallace, 2006) is not the way to a successful career opportunity. Many students believe that obtaining a geography degree will get them nowhere, but I believe differently. Geography is not just learning the capital cities of Canada, drawing maps or even writingRead MoreGeography And The World Of Geography1221 Words   |  5 Pagessuch as globalization, politic al geography, or industries and services. I was surprised at what all we learned in such a short period of time. I gained a new prospective and information about the world around me. Throughout the semester, my understanding and knowledge about geography has drastically changed from before this course. This course has made me think about topics and things that I have never reflected upon. I have had this standard premonition of geography as just places or maps, but thereRead MoreCulture and Geography effects of the Mississippi River1023 Words   |  5 PagesThe culture of the Mississippi River has an effect on geography and in turn geography impacts the culture along the Mississippi River. The geography of the Mississippi River provided early settlers with the natural resources to survive and thrive. At the same time the aggressive expansion of culture significantly impacted the Mississippi River’s region. History of settlement along the Mississippi River illustrates the fact that the geography of the river is a natural attraction to settlers. ArcheologicalRead MoreThe Five Themes Of Geography827 Words   |  4 Pages What is geography? Geography is when you study features of the earth and its atmosphere, human species and how human activity affect and are affected by these things. Geographers often tell people they study the â€Å"why of where.† Geographers often have to explain their interests in all the patterns of human and natural experiences and as they happen in certain places. Have you heard of the five themes of geography? The five themes of geography are: Location, Region, Movement, and Human/environmentRead MoreUrban Geography And The Human Agency1212 Words   |  5 PagesWith the sources provided it is evident how influential the social structure is on urban geography and the human agency in the continuum of the socio-spatial dialect. The talk by Wilkinson outlines social problems that correlate to inequality that is widening throughout developed countries. The Figures provide statistics of the inequality within Canada and the patterns that are not temporary but also not inevitable as discussed in the article about the Three Cities of Toronto. The article analysesRead MoreTerm Paper1057 Words   |  5 Pagesproblem within the firm and discuss what you think is causing the problem and how the problem might be better controlled. 3. Describe the job dimensions of the firm and discuss whether or not you believe the current design is appropriate for the firm. Discuss any suggestions you might have for improving the job design. Grouped by function or by product or geography or a matrix organization? Provide a diagram if helpful to illustrate. Is this organization effective? 4. Describe the compensation packageRead MoreHarsher Struggles for African American Women than Men1441 Words   |  6 Pagesor self-betterment. In the religions of Ancient Egypt, Buddhism and Christianity, a clear link between environment and religion can be seen. Religion has always been present in large civilizations and is a product of the environment, climate and geography. The sun god Ra was the most important and powerful of all in the polytheistic Ancient Egyptian religion (Shaw, 273). Not many of the images that come to mind when â€Å"Egypt† is mentioned contain clouds, and that is because the land of Egypt has swelteringRead MoreImportance Of World Geography994 Words   |  4 Pages Madie Stark Mrs. Bezy World Geography Honors August 16, 2017 According to merriam-webster.com; geography is a science that deals with the description, distribution, and interaction of the diverse physical, biological, and cultural features of the earth’s surface. In other words, it is the physical features and characteristics of certain areas that make the area unique. Small towns, big cities, and everything in-between each has its own culture, location, and special touches that

Outside Lies Magic Free Essays

There are certain things in life that people take for granted. As technology advances, the people would struggle to go on and fit in the crowd, making sure that everything is played accordingly. Because of these changes, people sometimes oversee things and take for granted the simple pleasures of life. We will write a custom essay sample on Outside Lies Magic or any similar topic only for you Order Now The book, Outside Lies Magic, shows people the simple things found around us that are taken for granted. As I was reading the book, I became open to more possible ideas around me. Although the book may sound like a textbook for many, this is one of the few literary works that people could actually appreciate. From everything that has been included in the book, two scenes stood out the most. The first part was when the author was discussing about wires and power. I became intrigued with the importance of the â€Å"wires† to the history of man and the possible contributions that they may have in society. Even if the history of mankind was quite difficult to explain, the author was able to do it in such a manner that the readers would become curious instead of being discouraged to read. The use of words was also something to be considered. The descriptive manner used would make the readers become interested to know how much information the author wants to share with everyone. Another part of the book that caught my attention was the chapter about mails. I was unaware of the history of the mailing system until I read this chapter. The demands of sending letter across the country and in the whole world increased as time passed by, making it more difficult for the postal services to fulfill their duties. Eventually, numerous people had to sacrifice their time and effort just to allow the mails to arrive on their preferred dates. I learned to appreciate the importance of my mailbox, and how it is accessible to me and to the whole world. However, this service was taken for granted and lacks the much needed appreciation. Thinking about it makes me thankful for all of the hard work taken away from me by such service. I just hope that someday, more people would be able to see and appreciate the little things that evolve around them. The last part was also something that I remembered greatly. Although the book was descriptive, the author was able to share with the readers how the simple things in life would mean the most. The readers are also given the impression that all things should be appreciated and given much importance. Regardless of the use of such descriptive words, the author was able to stick to the realities of life that many people try to escape from. And so, people should become open to committing mistakes, but still hope for the best in life. From everything that has been mentioned, I believe that the strongest part of the book is the first part. Talking about wires is not as easy as it may seem, because it is difficult to talk about wires and make them as interesting as possible. Reading the book allowed me to see a world that I was not aware of before. Taking the wirings for granted was something that people could relate to. I also became intrigued how people were able to organize all of the wires, and how these were identified. This allowed me to appreciate more people and things more, as each word was used. Reading the book came as a challenge for my end. English is not my first language, and some of the words used in the book were difficult for me to understand. However, the magic of words allowed me to explore and expand my knowledge further. For this, I was able to experience the magic of books, at the same time learn about the realities of life hidden from most people. Sometimes, it is not bad to look back and appreciate the humble beginnings of people and things. These are the essential things that would make the existence more worthy of the people’s appreciation. This is one of the few books that I would recommend for others to read. How to cite Outside Lies Magic, Papers

Monetary Policy Output Gap and Inflation Target

Question: Describe about the Output Gap and Inflation Target? Answer: Output Gap and Inflation Target When the economy experiences downturn then there is a decline in the economys output of goods and service. But when the economy recovers then that output, popularly known as countrys GDP increases. Policy makers and economist take interest in these ups and downs in the economy which is called business cycle. But what they are more concerned with is how close the gap between current output and potential output is. Their main interest is not only on the increase or decrease in GDP but also on the extent to which the GDP is above or below the potential level. This difference in the current or actual output and the potential output is the output gap. The potential output is defined as the maximum output an economy can produce when it is most efficient or in other words is at full capacity. The potential output is sometimes referred to as production capacity of the economy. With the rise and fall in GDP, the output gap can be positive and negative. A positive output gap occurs when current output exceeds the potential output. This happens when there is high demand and to meet this demand the workers operate above their efficient capacity. A negative output occurs when there is spare capacity and the economy has weak demand. The negative output gap is characterized when the potential GDP exceeds the potential GDP. (Abel and Bernanke, 2001) The presence of an output gap is represents that an economy is not at its efficient level- it is either overworking or underworking its resources. Policymakers tend to use the potential output to measure the dimension of inflation. In this regard, the output gap is like an indicator which analyzes the demand and supply components of economic activity. In short we can say state that the output gap evaluates the degree of inflation in the economy and it helps to establish an important linkage between the real side of the economy which includes the production of goods and services and inflation. During recession, a fall in aggregate demand causes output gap to be negative where potential GDP exceeds actual GDP. This output gap is directed by the increase in unemployment and unemployed resources. The level of output gap helps to recognize the level of inflation in the economy. The negative output gap determines inflation to be low. In this situation the monetary policy tend to be lax where a low rate of interest would be required to accentuate growth and diminish negative output. A positive output gap is a situation where the rate of growth is above the trend growth and this leads to a rise in inflationary pressure. Now this output gap is related to unemployment. The non accelerating inflation rate of unemployment (NAIRU) is that unemployment rate that is consistent with constant inflation rate. The deflection of unemployment rate from its NAIRU is related with the diversion of output from its potential level. If the policymakers are able to state that the actual employment rate is equal to the NAIRU, then the economy will be able to produce the maximum output without overutilizing the resources in short there would be no output gap and no inflation in the economy. As we have analyzed that output gap has close association with the rate of inflation. So we can establish a relationship between inflation and unemployment. The relationship between the level of unemployment and the rate of inflation in the economy is shown with the help of the Phillips curve. The policymakers could explain the tradeoff between the unemployment and inflation. The Phillips curve helps to explain that as unemployment in creases, the rate of inflation lowers. The reason behind this tradeoff between the inflation rate and the rate of unemployment is that with an increase in aggregate demand the real GDP increases and therefore firms hire more workers and thereby the level of unemployment falls. But as the economy touches the full capacity, we can witness some inflationary pressures. This is because as the level of unemployment is lowered, the workers get the urge to demand more money wages which leads to a wage inflation. Also firms can increase the prices because of this rising demand. So we can see that as the level of unemployment is decreasing the economy is experiencing higher inflation rate. (Imf.org, 2015) The deviation of the unemployment from NAIRU is related to the output gap which is the deviation of the actual output from its potential level. Thus the output gap acquires a central position in the course of policy making. Most of the central banks aim at attaining the full capacity level where full employment leads to no output gap. And almost all central bank attempts to control the rate of inflation and output gap plays an important role in determining the inflation pressure. The output is responsible for indication the over performing or underperforming nature of the economy and so monetary policies are in immediate requirement in this regard. The monetary policy can be implemented by the central bank to enhance growth when the economy is under recession and there is a negative output gap. This is done by lowering the interest rates in order to increase the demand and restrict inflation to fall below the central banks target on the inflation rate. Again in the boom period, there exist positive output gap which initiates inflation rate to grow and in this context the central bank can stimulate growth in the economy by increasing the interest rates. Thus the policy makers are increasingly using the output gap to target inflationary pressures in the economy. But there crept up certain difficulties in estimating the output gap, so the policymakers use other economic indicators like employment, utilizing the capacity, shortages in labor, money and credit growth and inflation relative to expectations to assess the overall capacity pressure within the economy. (Claus, n.d.) Bank Of England And Low Interest Rate Based On Inflation Targeting Model The inflation targeting model is described by a three equation model IS-PC-MR. over the years the main policy goal of most of the central bank is targeting inflation which is conducted by the implementation of the monetary policy. The key policy instrument in this case is the nominal interest rate. The model assumes that the central banks systematically try to minimize the fluctuations of output around its natural rate of full employment and fluctuations of inflation about its target. The model assumes that the rate of inflation goes through a slow and persistent process and its takes around a year for the monetary policy to impact the output and this in turn takes around a year for the output to affect the inflation rates. The model also assumes that the central bank sets the nominal interest rate (i) and can evaluate the real rate of interest based on i and the expected rate of inflation which is nothing buyt the inflation of the previous period considering the adjustment lag. The equation given below describes the above assumption: The model is implemented on the basis of three set of equations: IS curve: (Mankiw, 2007) The equation of the IS Curve is Where C is the consumption, I is the investment, G is the government expenditure, EX is the exports, IM is the imports and Y denotes the real GDP. In this model, any change in the real interest rate affects the spending. As r increases, the borrowings of the consumer fall which is depicted by a fall in the C. this fall also leads to a decrease in the real GDP. Again if r declines then I will fall because investment and real interest rate are inversely related. A fall in the level of investment leads to a decline in the real GDP,Y. Also if r declines then the level of export falls but the imports rise leading to a fall in the Y. So the central bank has to adjust r to determine the level of real GDP of the economy. Phillips curve (PC): It establishes an inverse relationship between the level of unemployment and the rate of inflation. The equation of the Phillips curve is given by: (Stock and Watson, 2008) Where is the inflation rate, e is the expected inflation rate, Y is the actual GDP and Ye is the potential GDP. So as Y exceeds Ye, there is positive output gap which leads to increase in inflation rate and as Ye exceeds Y, there arises negative output gap which lowers down the inflation rate. So in order to reduce inflation, it is the duty of the central bank to create an output gap. And creation of output gap is done by increasing the real rate of interest by the central bank. (Ma, 2014) Monetary Policy Reaction Function (MR): The monetary policy rule helps to explain the mechanism of adjusting the real interest rate to target inflation in response to different shocks within the economy. The objective of the model is to stabilize inflation by minimizing output fluctuations. (Bain and Howells, 2015) The MR works when the central bank raises the real interest rate in order to slump the economy and thereby reducing inflation. As inflation declines people adjust their expectations to be low. This will drive down the PC to the level of expected inflation. The lower inflation enables the central bank to decline in the interest rate and inflation falls. Gradually the target rate of inflation is acquired and the economy reaches the full employment. (Bain and Howells, 2003) Based on the Minutes Of The Monetary Policy Committee Meeting 7 and 8 January 2015 The CPI inflation was around 0.55 IN December 2014 and it declined below the target of 2%. The main reason behind the fall is the steep fall in the wholesale energy prices last year. Since the inflation is below its target, the unemployment is well above the sustainable rate. This can be explained by the PC which defines an inversely relationship between the inflation rate and the unemployment rate. In order to stimulate growth in the economy, there is an immediate need to return the inflation rate to its target and eliminate the economic slack. (BBC News, 2015) (Neuenkirch, 2013) There were significant developments after the Inflation report of November which included fall in oil price, the spot price of Brent crude oil had decreased to $50 per barrel. It was expected by the bank staff that the CPI would be below zero during the first half of 2015. The market interest had fallen due to the tight UK monetary policy. The outlook justified that it is necessary to maintain the current level of Bank Rate and the asset stock purchases (Aldrick, 2012)which is financed by the issuance of reserves of the central bank. The adjustment in the monetary policy would be adjusted to ensure that CPI inflation returned back to 2% target. The two members who voted for the increase in the Bank rate was of the view that the sharp fall in the inflation rate below 2% target was initiated by other temporary factors. (MINUTES OF THE MONETARY POLICY COMMITTEE MEETING 7 and 8 January 2015, 2015)Thus the decision by the Bank of England to maintain the interest rate at 0.5% requires a pr oper implementation of the UK monetary policy which would by the MR signifies that it should aim at improving the unemployment scenario to raise the inflation rate to its target. (Tradingeconomics.com, 2015)This will lower the real interest rate from the first equation which in turn increased the level of investment and thus improve the real GDP. Thus, improvement in the real GDP by the growth in the level of investment is justified by the IS curve. (Fender, 2012) Thus, Bank of Englands decision to hold interest rate at 0.5% would drive up the inflation to its target and thereby increasing the level of investment. This increase in the level of investment will drive up the aggregate demand and in short this will help to stimulate growth in the economy by increasing the real GDP. (Dow, Klaes and Montagnoli, 2009) (Gerdesmeier, Mongelli and Roffia, 2010) (Tradingeconomics.com, 2015) References Abel, A. and Bernanke, B. (2001).Macroeconomics. Boston: Addison-Wesley. Aldrick, P. (2012).Economists call time on quantitative easing after Bank votes to hold. [online] Telegraph.co.uk. Available at: https://www.telegraph.co.uk/finance/economics/9663744/Economists-call-time-on-quantitative-easing-after-Bank-votes-to-hold.html [Accessed 7 Mar. 2015]. Bain, K. and Howells, P. (2003).Monetary economics. Basingstoke: Palgrave Macmillan. Bain, M. and Howells, P. (2015).Monetary Economics: Policy and Its Theoretical Basis. Palgrave Macmillan. BBC News, (2015).Bank keeps UK interest rates on hold. [online] Available at: https://www.bbc.com/news/business-30726535 [Accessed 7 Mar. 2015]. Claus, I. (n.d.). Is the Output Gap a Useful Indicator of Inflation.SSRN Journal. Dow, S., Klaes, M. and Montagnoli, A. (2009). Risk And Uncertainty In Central Bank Signals: An Analysis Of Monetary Policy Committee Minutes.Metroeconomica, 60(4), pp.584-618. Fender, J. (2012).Monetary policy. Hoboken, N.J.: Wiley. Gerdesmeier, D., Mongelli, F. and Roffia, B. (2010). Interest Rate Setting by the Fed, the ECB, the Bank of Japan and the Bank of England Compared.Comp Econ Stud, 52(4), pp.549-574. Imf.org, (2015).What Is the Output Gap? - Back to Basics - Finance Development, September 2013. [online] Available at: https://www.imf.org/external/pubs/ft/fandd/2013/09/basics.htm [Accessed 7 Mar. 2015]. Ma, J. (2014). The Modern Phillips Curve Revisited.ME, 05(03), pp.188-200. Mankiw, N. (2007).Macroeconomics. New York: Worth Publishers. Minutes Of The Monetary Policy Committee Meeting 7 and 8 January 2015. (2015). 1st ed. [ebook] Available at: https://www.bankofengland.co.uk/publications/minutes/Documents/mpc/pdf/2015/jan.pdf [Accessed 7 Mar. 2015]. Neuenkirch, M. (2013). Predicting Bank of England's asset purchase decisions with MPC voting records.Applied Economics Letters, 20(13), pp.1275-1278. Stock, J. and Watson, M. (2008).Phillips curve inflation forecasts. Cambridge, Mass.: National Bureau of Economic Research. Tradingeconomics.com, (2015).BoE Shows Concerns Over Low Inflation. [online] Available at: https://www.tradingeconomics.com/articles/02122015110830.htm [Accessed 7 Mar. 2015]. Tradingeconomics.com, (2015).BoE Voted Unanimously to Leave Rates on Hold. [online] Available at: https://www.tradingeconomics.com/articles/01212015101809.htm [Accessed 7 Mar. 2015].