Liquidity Traps- Macroeconomics

[@inFamousxable]

You are the type of teacher we need but not the one we deserve.

[@valentinaminghetti8373]

"The real thing which is missing is inflation". 2021: hold my beer

[@Shubham21599]

2023: hold my whole beer supply

[@R9dyhQ.RDPD99yF0gDmSZqC]

I'd love follow up video on missing inflation. This subject is so important.

[@HarryRunes]

Really like this video. Reminds people that economics is a lot more nuanced than what they learn in introductory classes

[@tylerzhang5442]

Really really appreciate your work. There's been less and less teachers who would spend time relating these academic stuff to real life's events and try to make students see the meaning of the knowledge they are acquiring at the school. Thanks!

[@frankuher7155]

You’re a life saver. You’re videos help me get an A in my macroeconomics class. Thank you.

[@sdproductions9660]

your amazing for this vid. ive been trying to work my head around it for like 3 hours and you've came and made it all so easy

[@alltimechiller]

You're the God of Economics! I don't have to read any book after listening to your lectures. And thanks a bunch for speaking slow. It helps non-native English speakers.

[@jaidenreddy7473]

This vid is super relevant right now.

[@LifeKiT-i]

Your explanation is actually on point!

[@yashb2997]

Can you make a follow up on this inflation -- especially now after the COVID recession?

[@himanshuranjan83]

Wow such an eye opener

[@dr.billschlosser7983]

Outstanding discussion about what is happening and why. Consider the reality that we have already entered a recession, at about the same time China devalued the Yuan (August 2015) and we have not yet entered a recovery in full force. Passage of the proposed tax bill would help, along with passage of about a dozen bills sitting in the Senate waiting for something... We want to see a real jobs recovery. Most excellent video to set the stage for these discussions.

[@jamesgriffithmusic]

Dr. Bill Schlosser Are you saying we already entered a recession? because a recession is defined as a period decreased growth/gdp; usually 2 consecutive quarters.

[@dr.billschlosser7983]

Take a look at past recessions and you will not find those criteria on each recession. Statements of recessions do not happen until after the recovery in already in full swing. The NBER makes the call to inform the people about the recession that already happened, based on Business Cycles identified by the level of business activity. Personally, I use the PPI as one of the major indicators of the vitality of the US economy. Look at how the PPI responded in all past recessions and then look at 2010 - 2016. Specifically, look at 2015 and he devaluation of the Yuan crippling US exports and creating a nexus of imports on the supply side from China. It helped businesses buy low, but employment in the US stayed at its lowest labor participation rate in memory. Keep looking for the NBER to make the call about the "Greater Recession". Maybe it is not as bad as some think it is? Look at the indicators. P.S. GDP growth is NOT one of the indicators NBER looks at to call a recession. The NBER gives relatively little weight to real GDP because it is only measured quarterly and it is subject to continuing, large revisions. They use monthly reported statistics as primary indicators. -Dr. Bill

[@jamesgriffithmusic]

Dr. Bill Schlosser Awesome response! As a current econ student I really appreciate the clarification and extra information. thanks again!!

[@stuartpollock719]

This is one of the best videos so far! Thank you.

[@Super12212012]

This video aged insanely well.

[@GOwBorgs]

an updated commentary for 2021-2023 would be interesting based on this concept...from my observation, we're out of the liquidity trap (in Canada) as interest rates are increasing rapidly. However, inflation continues to increase, which is not traditionally supposed to happen. I believe addressing the current situation is not solvable by managing demand this time. I think we have to figure out how to manage the supply side of the equation now.

[@christophergoolsbee]

I disagree that there is no inflation. There is just little to no inflation where the FED chooses to look. Home prices are rising, stock markets are rising, commodities markets are rising, and cryptocurrencies are on the rise. The economy has high inflation in areas they don't want us looking. The excess reserves are going somewhere... it's just not toys and sporting goods. Thanks for the video!

[@middleohnowherenj7426]

These videos are life savers ! Thanks

[@noahshepard2163]

Hey Mr. Clifford, I liked this video a lot. You should also do a video breaking down the new tax bill? Thanks!

[@suzybitfulldrive2592]

I love you Mr Clifford

[@emiliamiller7756]

The intro song is a bangee

[@bruncibanci]

What's also different from the textbook is the fact that banks do not loan out their reserves. They loan out by creating a loan as an asset and a deposit as a liability, and then the central bank adds the reserves to a commercial bank's account (held at the central bank) to keep reserve requirements in check and the federal funds rate in its target range. Also, the money supply is not set by the central bank and the money multiplier was never anything but just a ratio of 2 not-so-correlated measures. So yea, textbook economics is really doing a bad job explaining how things work in practice. :/

[@TACOSonSTEROIDS]

Great video! Curious to see what kinds of sources are worth looking into to stay up to date on this circumstance.

[@Shaylie13]

Wow he was so right, prices be crazy rn

[@teksight9714]

Everyone says there is no inflation, but what about in housing, equities, and cars? These all are much more expensive now on easy liquidity by the Fed. Does inflation in the price of a house due to speculation on easy liquidity not count?

[@maxteitelbaum5388]

Hey Mr. Clifford, could you make a video on the IS-LM model?

[@robertmainville4881]

That was pretty much the subject of this video.

[@DarylDiong]

Really informative. Glad I subscribed!

[@amansaxena4188]

Comprehensive explanation.. Thnxxx...

[@Gilbertopuppy]

Excellent video Professor!

[@k3ys]

I also liked this video. I like how it's relevant to what's going on in current events.

[@zakv8120]

This video has a new found relevance

[@googledude5649]

Clifford ! I would love to hear your thoughts on the actual situation.

[@brettf2321]

your best video

[@cherieminn2673]

i love your very clear explanation 💯 TQ💗

[@partymode1517]

i feel like because of your videos my teacher doesn't teach anymore

[@vatsalnahata7283]

Awesome! Love from India

[@TheSterg98]

I think we found this missing inflation

[@Fivesbasement]

Very good video

[@yiansun966]

this man doesnt age..

[@CStrik3r]

Wouldn't the absence of Inflation be explained by: 1) The fall in Velocity of money and, 2) The fact that money that is created but is just sitting around unused has a Velocity of 0, and thus doesn't have any effect on Inflation ???? If this is the case then I think this doesn't discredit some economic theories but actually further validates them (especially the Quantity Theory of Money). But I'm not sure if I'm missing something. I'd appreciate some help.

[@2hbhdtl]

Sounds very plausible. Doesn't it just support the concept of the liquidity trap? That there won't be any affect on AD?

[@mayankbhardwaj11111]

You are the best.

[@budaibalint7524]

Hey, could you make a video on cryptocurrencies and how can they affect the economy?

[@JacobAClifford]

Yes, that is on my list.

[@nurulfaiezi4838]

I'm excited

[@mecheatgood]

Central governments fear bitcoin because should they create massive inflation people might switch to bitcoin or other alternative cryptocurrenices. Which would negate the power of the all the newly printed out-thin-air currency the central bank created.

[@hugosalinasaliaga5266]

Will Bitcoin work when the power is out?

[@Vkob]

Inflation isn't missing. It went into assets.

[@the_real_economics]

Inflation means increase in money supply, increase in prices. This means any prices, prices in general. What do you or FED measure inflation with? Some indices? Do you include in those indices prices of real estates or prices of stocks? No, inflation of real estates prices and stock prices are interpreted not as inflation, but rather than wealth "growth". - There is your inflation. Moreover, US dollar is WORLD reserve currency, meaning there are many international holders of US dollars, not just US citizens, so the inflation can be exported. US dollar is not just used in US economy. Who is the biggest holder of US debt? China. And with inflation, they are as a creditor losing money. You are welcome. You should also know the difference between monetary base and money supply. The excess reserves are only increasing monetary base, not money supply, they will start increasing monetary supply once they are loaned out.

[@ghostcat9588]

At the end, it looked like you pushed yourself away haha. Anyway, thanks for this video.

[@TheXdinosaur]

Great video

[@shinkansen1907]

It's 2022, and we see inflation!

[@ahmetfatihsanlsoy5674]

Hey Mr.Clifford, this is the first comment on this video, does it make this comment more valuable?

[@JacobAClifford]

Yes, totally! :)

[@orivalx]

Until healthy competition comes in with cheaper alternatives

[@brokentombot]

The market value is higher but the intrinsic value is no higher because comments on KZbin are fungible.

[@ahmetfatihsanlsoy5674]

@@brokentombot broo I passed micro and macro economics thanks to Jacob Clifford 3 years ago. I got CB from micro and BB from macro by the way :) This comment made me come back to this video, i feel different emotions man :)

[@pezpeculiar9557]

What is the theory behind the money multiplier to be less than 1?

[@Trueseculardesi]

I saw this vid rn, and this money multiplier thing messed up all what I had just studied for the exam tomorrow.

[@godofgodsforever]

good video thx

[@isabelamcnanta9918]

watching this in 2023... we found the inflation

[@JezebelIsHongry]

This aged like milk.

[@gregconlin4739]

If central bank buys large enough quantity of bonds (QE), won't bond yields always decrease further and therefore the interest rate.... regardless of how banks use their increased reserves? Or does liquidity trap assume central bank can't influence bond yields?

[@aglet4778]

So could the inflation be delayed and lead to stagflation during crisis?

[@JezebelIsHongry]

Milton Friedman has left the chat

[@anand9405]

Regards from India..🙏

[@hugosalinasaliaga5266]

It appears thatl interest payed to banks by the Fed on excess reserves was implemented during the last financial crisis. The video implies that banks would rather hold the excesses in reserve ti receive this interest rate and it is preventing all of thus money from circulating and generating inflation. Why is the Fed concerned they can't meet the 2% inflation requirement knowing that this interest on excess reserves is part of the problem?

[@alejandro_1776]

“We are gonna have more inflation, but in reality, that’s not happening”. This video aged like milk

[@markfunkhouser791]

Okay so what do you think about this "transitory" inflation we are having now. Is it going to last?

[@kcg5336]

He has another video explaining, go to his vids and sort from newest. It's in the top 10.

[@nurulfaiezi4838]

Do you have trade blocks video??

[@muhammadsadiqmughal4689]

Mr Clifford are the concepts same? I am giving Cambridge exams A2 economics?

[@ziyanbadshah3569]

Well , Inflation has finally caught up 5 years from this video

[@mariofischer5437]

A bank can‘t lend out reserves. That is a misconception. Check the accounting for this.

[@amaral6833]

watching this video in 2023... Inflation is no longer missing, we have found it! :D

[@coldstrike3434]

welp now we know where that missing inflation is

[@rcrystals]

banks are not lending? then who's been lending astronomical amounts of money to the corporates?

[@Manman3872]

0:00 AAH

[@chriswyse3345]

The Reserve Ratio is set at 10%, and banks have the ability to increase that reserve as much as they would like. Right now we're seeing unprecedented excess balances across all banks. Has anyone suggested that the Fed implement a ceiling (max) reserve for all private banks to push that money back into the spending stream? What would the unintended consequences of such a monetary policy be?

[@josiasnkwana9282]

inflation

[@adrianomattia5625]

When they'll start lending that money..... :/

[@ludaibrasavenature2073]

Mr jacob what is the name of ur app

[@RoyReyes]

this was the time to buy stocks and crypto

[@xrunrumbumm7499]

Here's inflation rn

[@chitrapoyyamoli2877]

please make a video on cryptocurrencies and any crisis would happen due to this

[@mattnelson2379]

1:30

[@Josefk40]

and inflation finally arrived...

[@teaganharris6206]

This aged well

[@Nimosomething]

The missing inflation is because you're talking about the us economy where the $ is the global currency for transactions and also where it's one of the main destinations money purchases treasuries in other words it's due to not only the domestic economy but also to the way the USA has integrated itself into the international economy, this is not a sustainable system in the long run because any other country with equally big economy ie, china could use this against the us in fact they're testing such economic policies right now as am writing this by issuing first dollar bonds in three years in Saudi Arabia this week.

[@FRANKWHITE1996]

Im here from the future. Will you believe if ill tell you there is gonna be a negative interests rate? 😂

[@KC-zn2no]

Yeah so finanlly now we see the inflation -_-

[@JDMricist]

Dang, you lost weight! Lookin good!

[@lelezhoumi8737]

Iraqi student try to understand this…

[@sarabestaatal]

Lmao because of the alien it's easier to remember the liquidity itS A TRAP

[@elifnacak187]

dude you save my life you ar the hidden bible than you

[@alvydasjokubauskas2587]

you scared me.. At the beginning.

[@maxi12345267]

Awesome video, please go buy a new shirt now. 1 in order to simulate the local economy 2. its hardly possible to look more like high school teacher with a checkered shirt rolled up sleeves and a visible undershirt