!DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Strict//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-strict.dtd"> Streamline Training & Documentation: Brad DeLong on the Credit Economy

Tuesday, January 27, 2009

Brad DeLong on the Credit Economy

With all the current discussion of government intervention in the economy, it makes sense to take advantage of opportunities to bone up on basic principles of how a credit economy works.

Brad DeLong, an economics professor at the University of California at Berkeley, has posted a helpful explanation of how changes in the velocity of money — the rate at which a given quantity of money moves from hand to hand as people engage in various transactions — enable the government to make investments without crowding out private investment if there are idle resources in the economy. At the moment, the quantity of idle resources is rising daily as companies continue to lay off workers.

The post is short, so one can read it at a deliberate pace in just a few minutes. It will be time well spent (as long as you don't mind the overlay of attitude in DeLong's exposition).


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