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Much has been argued about Kaldor’s six stylised facts. These are six theories that describe the economic growth in a nation. In the theories, Kaldor did not claim that any of the quantities would be constant at all times in history (Wiles, 2015). To the contrary, he argued that income shares and growth rates fluctuate over a certain business cycle. In regard to the central banker question chart on the protester’s t-shirts, the data intersect with some of the Kaldor's statements. In particular, the chart describes below-target inflation, flat wages and rising EPOP scenarios. It describes the disparities in productivity and hourly compensation business growth from 1948 to 2017.
Examining the chart closely, Kaldor’s statements 1 and 2 totally intersects with the details. The chart describes a constant increase in the outputs/productivity in the period 1948-2017. This is in agreement with Kaldor’s first statement which argued that output per worker grows at a constant rate over a long period of time (Wiles, 2015). The second statement argued that growth of capital per worker over a period of time is constant. This fully conforms to the chart. The two statements are in conformity with details on the chart.
However, focusing on the two curves on the protester's chart, one curve contain the information that is already on Kaldor's statements. The other curve (the red curve) indicates that the hourly compensation is not growing at a constant from 1975 to 2017. In other words, the hourly compensation does not increase at a constant rate with the productivity rate over a long period of time. This information should be added to the Kaldor's statements since it is not captured in his economic facts. The disparities might be as a result of adoption of alternatives and efficient production mechanisms in the economies. Various innovations have been developed which in this regard has influenced the chart on the t-shirt.
The United States public exert a minimal oversight role to the Federal Reserve System. The system is required to work within the objectives established by Congress. Congress has, however, given Federal Reserve the independence to carry out its tasks out of any political pressure. Little oversight of Fed by the public is specifically because the public expects Federal Reserve to be in a position to raise or lower the rates in the banks across the country. Another reason for the oversight is in the current economy the inflation rates are very high and the central bank is not dong much to prevent the economy from overheating (Mathonnat &Minea, 2018). Federal Reserve is supposed to be a powerful lever to guide the economy pace but nowadays that is not the case. In another word, the public only felt the hardship of the economy but cannot do anything apart from mandating the Congress in the oversight roles.
1. Mathonnat, & Minea, A. (2018). Financial development and the occurrence of banking crises. Journal of Banking &Manage Finance.
2. Wiles. W. (2015). Federal Reserve System.