[lbo-talk] Krugman's babysitting co-op model

Tayssir John Gabbour tjg at pentaside.org
Tue May 23 19:27:22 PDT 2006


Excuse me if this is a newbie question; I looked at Krugman's baby-sitting co-op model, and it seems clear that my education isn't really good enough to evaluate it. And his formalized description just has too many hanging variable names and higher-level concepts. http://web.mit.edu/krugman/www/babysit.html http://www.pkarchive.org/theory/MINIMAC.html

So my thoughts are:

* Is this really a sufficiently large model to feature recessions? (Even granted this chops out nearly everything important about the economy we live under, like radically unequal distributions of wealth/capital, the dependence of livelihoods on it, etc.)

* Is there actually a point to money in this model? There's no barter between particularly different commodities; tallying babysitting hours on paper seems more than adequate. Money is too finite.

* Why wouldn't the money's devaluation be (in principle) the same as injecting new money into the supply?

* What would be the effect of me starting a private credit market, if anything?

Thanks, Tayssir



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