[lbo-talk] Bernanke
Eubulides
paraconsistent at comcast.net
Sat Sep 15 14:05:21 PDT 2007
Doug Henwood wrote:
> On Sep 15, 2007, at 2:30 PM, Eubulides wrote:
>
>
>> Foreign investment in
>> 2003 was $130 billion compared to $115 billion here at home. So we
>> don't
>> have a huge amount of excess capacity and, if we were to cut the
>> current
>> account deficit by only 25 percent, our capacity utilization rate
>> would
>> increase from 79 to 86 percent. If we cut the deficit in half, the
>> utilization rate would go to 93 percent." David Hale:
>>
>> <http://www.levy.org/default.asp?
>> view=publications_view&pubID=10654b0b370>
>>
>
> Bernanke's point is that we need investment to increase capacity. The
> Fed doesn't like cap'y util much above 82%.
>
> Doug
>
>
====================
Right, but it's hard to see how markups would remain constant or improve
if competition increases as a result of capacity expansion; and if a
flurry of sectoral innovations emerges in the capacity expansion process
that precipitate changes in capital/labor ratios that would further
lower the wage share, no? By the latter I mean, to take one example,
what would happen if GM became as efficient from an engineering/shop
floor pov as Toyota given the already existing overcapacity in autos?
Ian
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