It should be noted that secular stagnation is not an accident; it is exactly what the policy elites in the United States want. Inflation is under control, taxes are low, and the environment is favourable for developing strong corporations. Although politicians pay lip service to faster growth and job creation, the revealed preference is that they do not actually want such an outcome.…Short, not wonkish, and insightful about today's US economic situation and its politics.
Bond Economics
The United States of Stagnation
Brian Romanchuk
2 comments:
As seen above, job growth and the shrinkage of the participation rate pushed down the Unemployment Rate to 5.0%, where it has been stuck for a few months. For some inflation worriers, this is close enough to the insubstantial level of NAIRU (link to background article on NAIRU) to cause them to proclaim that the labour market is "healed" and there is a need to raise rates.
Hooray, an end to ZIRP.
In conclusion, we are only likely to see an actual change in the policy regime once there is a political movement that pushes for those changes.
Precisely. The Trump phenomenon and 'feel the Bern' are preliminary practice runs for the real thing.
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