Talk:Penn effect

MV=PQ?
If MV = PQ, and if (since 1950, amongst industrialized nations, per the PWT) Ps have increased more than Qs; then the Penn Effect has cost industrialized nations an enormous amount of real production (Q), by diverting spending towards increasing costs, prices, and wages (P). For example, what if the USA had a $15T/yr. annual GDP, at 1950s price-levels ? According to a Libertarian Party pamphlet, price inflation in the US since that era has been caused by an increasingly enormous (direct & indirect) tax burden, as well as increasing wage costs. Perhaps Big Government intrusion into economies, as well as wage contracts by organized labor, are characteristic of industrialized nations, by which means those nations have foregone enormous amounts of real production (Q), in favor of tax-burdened & wage-hiked costs & prices (P) ?? 24.143.92.97 (talk) 00:07, 2 June 2012 (UTC)

"Hidden taxes" account for one to three quarters of final costs of many products, according to the Americans for Tax Reform. An older study cited Ford Taurus costs, at $23K with taxes, and $13K without. All i can find at present, looking online, is:

http://www.fiscalaccountability.org/tax-bites#

i hypothesize that "hidden taxes" (indirect business taxes), taxes generally, and high labor costs, which have been imposed into western economies since WWII by populist movements, account for the Penn Effect, of supra-normal costs & price-levels, "plaguing" more developed economies.24.143.92.97 (talk) 23:38, 2 June 2012 (UTC)

needs a more descriptive, and more standard, name
This page needs a more descriptive, and more standard, name.

If someone is curious about why things are cheaper in poor countries there is almost no chance of them finding this page or Balassa-Samuelson effect based on their names. On top of the fact that the names are meaningless to non-economists is the fact that "Penn effect" is a fairly arbitrary name. I don't know how widespread this name is even within research macroeconomics. I should find out, but time is short. Anyway, I don't think there should be a page called "Balassa-Samuelson effect (hypothesis)" and "Balassa-Sameulson effect (empirical)" because:
 * 1) Giving them the same name implies that the BS-hypothesis is endorsed by Wikipedia as the explanation fot the PPP-deviation.
 * 2) It is necessary to refer to both of them frequently in the general discussion and having to do so with lengthy names is cumbersome to write and confusing to read. The names should be clearly differentiated but descriptive, and only one of them should contain the names of Samuelson or Balassa (in my opinion).

Wragge 00:36, 2005 May 19 (UTC)


 * I think of the Penn effect as being the standard name. What else would you suggest? CRGreathouse (t | c) 17:45, 23 December 2008 (UTC)

Erroneous section: 'The international development implications'
In this section, it is said that if money incomes are held constant, and the Penn effect were not true, the real incomes of many people in poorer countries would be lower. This is statement is invalid as prices determine money incomes. In a closed economy, gross expenditures are equivalent to gross incomes (a's spending is b's income). The scenario suggested is akin to changing the diameter of a circle, while holding the radius constant. — Preceding unsigned comment added by Utility maximiser (talk • contribs) 09:14, 8 February 2020 (UTC)

AungSoeMoe117.18.231.20 117.18.231.230 (talk) 15:46, 19 March 2024 (UTC)