The Economics of Furniture, Part I

I am an economist in the financial industry. This is the first part of a series that I will dedicate to analyzing the economics of furniture. In short, I'll take a top down look at the industry from a macroeconomic point of view. A note to readers: if I use any terms here that are unfamiliar to you, please comment or send me an Email. I may build a glossary here at A Wilder Finish.

Within the context of the global economy, the US economy is considered a large open economy. What that means from an economic point of view is that we participate in the global financial and economic markets but are price setters. Basically, US policy matters for the rest of the world. For example, as the United States Federal Reserve Bank lowers interest rates, global rates in Germany or the UK fall as well. I am not here to discuss monetary policy - you could go to various other blogs in order to get that sort of information: David Beckworth's blog, Scott Sumner's blog, or Barry Ritholz's blog on markets and economics. And if you wish to read on the theory of Money, please see Randy Wray's blog.

How do the furniture goods and services industries fit in to the construct of the US economy? In short, furniture (the kind that you care about) is a small portion of US consumer spending.