1. “The Great Credit Bubble may have burst but the age of oversupply has not ended. …Abundant labor, excess capital, and cheap money are here to stay.” What does this supply side nightmare
scenario imply? 2. Identify the global imbalances caused by financial and trade relations between [1] Advanced Economies [2] ELOWASEENS [3] Japan 3. How did democratization of debt in the USA
benefit China and Japan? 4. “By 2011, wages as share of GDP had fallen to 43 percent. The same year, corporate profits soared to over 60 percent of GDP — the highest level before the Great
Depression If you keep unit pricing static, the less paid to labor. The higher the return to capital. The greater the polarization of wealth, the fewer individual, per capita, participating in
corporate [capital] ownership and the returns thereon. And the greater polarization of wealth and income, the greater the need to supplement income with borrowing. The virtuous circle of investment
and economic growth devolved to a vicious circle of debt, disinvestment, and slump.” What strategies ae there to break the vicious circle? 5. “The problem … is insufficient aggregate demand
relative to an overabundance of supply. Human labor is presently the world’s most overabundant resource… In the age of oversupply, the prospects are dim for the private sector investing in job
creating new capacity…Yet when it comes to revitalization of infrastructure, advanced nations are lagging and threaten to fall behind their new competitors.” The way forward for developed
countries, then, is to undertake historic investments in infrastructures. Do you agree? Why? Why not?