The economists and central bankers of the US Federal Reserve have a perplexing challenge. The US economy has picked up in terms of GDP growth, but inflation is below the Goldilocks target of 2%. How could economic models be wrong? What, if anything, has changed? It has spurred a serious discussion that suggests that US economy operates differently now. I think the answer is obvious – DEFLATION! We have deflation, just not in an absolute form. We have deflation in the economy like you might have bugs in your house. They are not everywhere, just in places. Overall, the house is mostly clean, but there are some bugs.
Automation, Baby boomers, Bots, Brexit, Canada, China, Congress, Deflation, Demographics, Digitization, economic growth, economics, featured, GDP, GDP growth, houshold income, Inflation, interest rates, Irving Fisher, lower taxes, Mexico, Millennials, Milton Friedman, Population, real income, Taxation, taxes, Trade, Unemployment, USA trade, yellen
The World in 2050: Rapid Changes Ahead Last week, I picked up a copy of the Wall Street Journal and was saddened and troubled to see the picture of a baby Syrian boy’s body being recovered from the sea. It was all the more ironic that I was preparing to give a talk on the […]
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