Tuesday, June 27, 2017

Economic Growth And Private Sector Debt Levels: Lessons (Not Yet?) Learned — Investment Cycle Engine, Inc

  • High private sector debt/GDP ratios will continue to hamper US economic growth.
  • Mainstream macroeconomic models by design ignore the financial cycle and do not provide any insights about the financial cycle.
  • Macroeconomic models should have macroeconomic foundations and incorporate financial stability considerations.
Good post based on a Post Keynesian analysis. But doesn't mention either Hyman Minsky, whose financial instability hypothesis explains the financial cycle, or MMT, which would bolster his argument. However, I understand the scope of posts at blogs is limited, so he had to make choices, and overall the post is well done the way he sets it up.

1 comment:

Ralph Musgrave said...

Coincidentally I left a comment there a day or two ago.