Powers's "leakage" ( was Re: Using PCT to model Economics ( Re: PCT Economics ))

[Martin Lewitt Nov 13, 2010 0606 MST]

[From Rick Marken (2010.11.09.1630)]

  [Martin Lewitt Nov 9, 2010 1356 MST]

Richard,

I started reading your paper and got waylaid by the references to Powers
earlier work. You don't provide the detail reference at the end of your
paper, and there is what appears to be a typo, at least one of the
references is to 1966 rather 1996? Do you have a copy of these references
that you can forward?

Sorry about that. That's a copy of a paper I presented at a meeting of
the CSG some years ago. It was extremely poorly received. The only
reference is to T.C. Powers book "Leakage" which was published in
1996. You can get a copy at Amazon.

http://www.amazon.com/Leakage-Bleeding-American-Treval-Powers/dp/0964712113/ref=sr_1_1?s=books&ie=UTF8&qid=1289348561&sr=1-1

T. C. Powers though he could measure leakage. But I think it's really
just a theoretical notion. T. C. Powers' analysis is not perfect but
it really helped me finally get a good grip on what macroeconomis is
about; what an economy is. It seems like a much better start than I've
seen in any of the economics texts I've read.

I suspect that it is just something that isn't captured in the macro economic numbers he analyzed. For instance, the dollars imigrants send back to their home countries often stay and circulate there. The dollar has been a reserve currency outside the US, so the money that leaks out can be repeatedly honored elsewhere and not come back into the US economy. This doesn't create a shortage of money in the US economy, because the dollar is a fiat currency and the leakage just gives the federal reserve leeway to create more.

Martin L.

···

On 11/9/2010 5:31 PM, Richard Marken wrote:

Best

Rick