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About that last sentence...
Both the central bank and the government impact the economy...
That is true.
... the central bank and the government impact the economy...
That is equally true. Depending on the context, it may be better to include the word "both".
... the central bank and the government impact the economy through monetary policy and fiscal policy...
That would make a good sentence. Neither policy is explicitly assigned to either institution, so the sentence is true.
... the central bank and the government impact the economy through monetary and fiscal policy, respectively.
That one is the most informative would-be sentence of all these options, because the policies are correctly assigned to the institutions. And finally:
Both the central bank and the government impact the economy through monetary and fiscal policy, respectively.
That
is gibberish. Investopedia is saying that the central bank and the
government, both of them, use both monetary and fiscal policy. (That is not true; the central bank was created specifically to handle monetary policy, and is held to be "independent" and free from government interference.) And in the same sentence Investopedia is also saying
that the first of the two institutions uses the first policy noted, and
the second institution uses the second policy. This they are correct in saying, but it is contradicted by all the words that come before "respectively" because of that damn "both".
That is, because they open with the word "both" they are saying that both the central bank and the government use the two policies -- that each institution uses both policies. And because the word respectively is used, they are also saying that the
central bank uses only monetary policy and the government uses only fiscal policy. Because they have the word "respectively" there, the sentence is not only wrong but is also embarrassingly bad. I imagine, however, that Investopedia is not at all embarrassed, because they are unaware of the problem. That's how illiteracy works.
Frankly, I have similar problems with Investopedia's economics.
5 comments:
Good catch! (You’re still in my RSS.)
Another way to do it, to avoid the retroactive “respectively”: The central bank and the government both impact the economy, the one through monetary policy, the other through fiscal policy. More words, I know.
Hey , Michael. (and I still visit your site quite often, though less than when I was always pestering you!)
"Respectively" usually strikes me as classy, probably because it is used so infrequently. But thanks to Investopedia, I may never be able to see it that way again. These days, "both" is very often incorrectly used; it would generally be better (I think) if newscasters just left it out of their sentences.
I had a good time writing that post.
An "interesting" election result, three weeks back. My econ focus now is on what really happens when federal budgets are severely cut. I found this 2-page PDF very interesting:
http://tankona.free.fr/thayer96.pdf
Happy Thanksgiving.
Hey Art,
Glad to see you’re still at this blogging thing! It’s been forever since I visited your site but I was a regular reader of your New Arthurian Econ back in the post GFC days. Hope you’re doing well! I’ve moved twice since the last time I commented on one of your posts , (probably around 2016,2017) and I now reside in Texas.
Agree about the interesting election. Here with all the Elon fan boys it’s a little nuts. Can’t wait to see what DOGE dreams up.
Well, now that I tracked you down (sounds kinda creepy doesn’t it) I will try and check back regularly
Take Care
Greg
Hey Greg! I remember. We had a lot of conversations for a while there. Glad you found me!
This blog is where I think about writing better. I moved to a new econ blog a while back; I don't post to the old econ blog any more.
I was okay with Musk till around the time he bought Twitter. Now I see him as a powerful example of "power corrupts."
I am deeply troubled by the Trump/Musk/DOGE thing. I went back to Asymptosis and found "Does Reducing the Federal Debt Cause Financial Collapse?"
and "This Time Is Different: Federal Debt Didn’t Dive Before the Depression".
I also found there a highly motivating 2-page PDF.
and I can use all the help I can get, to think about such things.
Hey, you put me in a good mood, bud.
Glad I put you in a good mood!
Yeah Musk is getting way too big for his britches. I really dont want to hear about extra planetary life within our solar system, that’s no solution at all. Any chance beyond earth requires a whole other solar system.
All this carping on the Federal debt is starting to sound so 2009, sad we never learn from the past and these crypto bros are the worse. Scream about money printing and loans “out of thin air” yet dont blink when some tech guy says “Im gonna make my own virtual token and call it blah blah blah”. Where did THAT coin come from…. THIN AIR!! The lack of critical thinking is quite depressing
I do however see an opportunity for the right people to point out to the masses that in fact this whole crypto craze perfectly illustrates a point about money that was fought tooth and nail by the hard money types, many who are crypto bros now, and that is that money can be created by anyone and the trick is getting others to accept it. Crypto gets people to accept it because someone creates a price in dollars for it by buying it and if price rises early on many succumb to FOMO and want to buy in….. til it crashes because a new shiny thing emerges.
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