The hollowing out of the middle class and increasing number of billionaires has more to do with the distribution of the gains from production. This is not a part of the Moniac which addresses only consumption and production. The effects of distribution is not a part of most macroeconomic models (which tend to ignore distributional effects). The effects of deficit spending will vary with the state of the economy but are not related to distribution (it affects investment and economic growth). It is the repayment of debt that can have distributional effects. If the MPC ever exceeds 100% in a country the result would be high inflation and high interest rates. This would eventually empty the investment pool and to maintain above 100% would require a sharp increase in imports and exports. Even that would be limited since global MPC can not exceed 100%. he result would be a contraction in the economy and falls in GDP that are severe and prolonged. To my knowledge there is no historical economic crisis related to a MPC equaling or exceeding 100%.

lucky to have been taught by someone who seems so passionate. you must have learnt a lot in your three years. Do you have any advice for someone looking to take up economics at uni?

Me too brother. Best of luck with your applications.

The model was built in 1949, where money is still pegged to gold and thus inflation was not considered. Many of the underlying principles are also outdated, but it is an effective teaching tool and simulator for the time.

@@tonysoviet3692 Yeah the US economy only officially abandoned the gold standard on 15 August 1971, when Richard Nixon was president.

Inflation is a general rise of goods prices not stritcly linked to value of money( depreciation etc) just to point it out

Living for some good few years in England and observing the political, social and economical situation I would say that this is rather the destination that the UK is heading towards faster by the day. Scotland eventually will get independence, then NI and Republic of Ireland will unite, Wales will find the courage to go its own way at some point too. Wouldn’t be so ironic that the UK decided to divorce with the EU just to end up completely dissolved with its own union? Time will tell.

Probably it looks like this because in a normal FTA the parties are somewhat apart and agree to what they can accept, where they want to align more, and where to leave things as they are for the time being. The UK-EU deal is the opposite: two parties 100% aligned for nearly 5 decades, with one party dumping all agreements at once, wanting to divert, but wanting to keep as much as possible of the benefits whilst getting rid of the obligations, and not telling the other party in which area they will divert, how far they will take it, and in which direction. So the outcome will be a deal where the party that is left in the dark needs assurances that they won't be unfsirly exploited in the future by the leading party.

So true. Not good

Its the same in the UK, we do not discuss Germany at all literally. It comes as somewhat of a shock to see Germans on the internet attacking the UK over Brexit lol.

Brexit was mainly about escaping political union not just bureaucracy.

It is just plain to see that Brexit bureaucracy is much bigger (more bureaucrats) than the entire EU and it is just starting. 50 000 new customs agents in the UK and more elsewhere. The EU was NEVER about bureaucracy but about freedom, justice, peace, business made easy without borders. Enjoy your new Sovereignty, Brexiteer