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Paradox of flexibility

From Wikipedia, the free encyclopedia

The paradox of flexibility is that a debt deflation shock can create a situation where increased price and wage flexibility results in decreased total demand. This term was introduced by economists Paul Krugman and Gauti Eggertsson in the paper Debt, Deleveraging, and the Liquidity Trap: A Fisher-Minsky-Koo Approach.[1] The term was intended to complement the "paradox of thrift", a concept resurrected by John Maynard Keynes and Eggertsson's earlier work on the "paradox of toil".[2] Krugman and Eggertsson proposed that the paradox of toil and the paradox of flexibility mean that wage and price flexibility do not facilitate recovery from recessions during a liquidity trap, but actually exacerbate them.

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Transcription

Every cell in your body is separated from those around it by its outermost layer, its membrane. A cell membrane must be both sturdy and flexible. Imagine a membrane made of metal - great at keeping the cell's guts inside, but horrible at letting materials flow in and out. But a membrane made of fishnet stocking would go too far in the opposite direction - leaky, but easily torn. So, the ideal membrane falls somewhere in the middle. Over the past few centuries, we've learned a lot about the way membranes work. The tale starts in the late 1800's when, according to legend, a German woman named Agnes Pockels was doing dishes. Her observation, that not all detergents dissolve grease in the same way, piqued her curiosity, so she made careful measurements of the size of soapy films that formed on the surface of a metal tray filled with water. Later, in the 1920's, GE scientists Irving Langmuir and Katharine Blodgett reexamined the problem with a more elaborate contraption and found that those tiny slicks were in fact a single layer of oil molecules. Each oil molecule has one side that loves water and floats on the surface, and one side that loathes water and protrudes into the air. So what does it have to do with cell membranes? Well, at the turn of the 20th century, chemists Charles Overton and Hans Meyer demonstrated that the cell membrane is composed of substances that, like oil, have a water-loving part and a water-loathing part. We now call these substances lipids. In 1925, two scientists, Evert Gorter and Francois Grendel, pushed our understanding further. They designed an experiment meant to test whether cell membranes are made of only one layer of lipids, a monolayer, or two layers stacked on top of one another, called a bilayer. Gorter and Grendel drew blood from a dog, a sheep, a rabbit, a goat, a guinea pig, and human volunteers. From each of these samples, they extracted all the lipids from all the red blood cells and placed a few drops of this extract on a tray of water. True to form, the lipids, like oil, spread out into a monolayer, whose size Gorter and Grendel could measure. If they compared the surface area of that monolayer to the surface area to the intact red blood cells, they'd be able to tell whether the red blood cell membrane is one or two layers thick. To understand the design of their experiment, imagine looking down at a sandwich. If you measure the surface area of what you see, you'll get the dimensions of a single slice of bread even though there are two slices, one stacked perfectly atop the other. But, if you open the sandwich and place the two slices side by side, you get twice the surface area. The Gorter and Grendel experiment is basically the same idea. The open sandwich is the monolayer formed by extracted cellular lipids spreading out into a sheet. The closed sandwich is the intact red blood cell membrane. Low and behold, they observed a two-to-one ratio, proving beyond the shadow of a doubt that a cell membrane is a bilayer, which when unstacked, yields a monolayer twice its size. So almost 30 years before the double-helix structure of DNA was elucidated, a single experiment involving fancy versions of household materials enabled deep insight into the basic architecture of the cell.

References

  1. ^ Eggertsson, Gauti B.; Krugman, Paul (14 February 2011), Debt, Deleveraging, and the Liquidity Trap: A Fisher-Minsky-Koo Approach (PDF), archived from the original (PDF) on 3 October 2011, retrieved 15 December 2011
  2. ^ Eggertsson, Gauti (Feb 2010). "The Paradox of Toil" (PDF). NY Fed Staff Report. New York, NY: Federal Reserve Bank of New York (433). Retrieved 2011-12-15.


This page was last edited on 18 December 2020, at 01:09
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