Tag Archives: depression

It is largely irrelevant, but still the political theater is fascinating. As is now standard operating procedure, whatever comes out of the Trump administration immediately is conferred as the standard for awful. This is not my own determination, mind you, but that of the mainstream, whatever that is these days. And so it is with the first set of budget figures that include very robust growth projections, a point of...

There are actually two parts to examining the orthodox treatment of the output gap. The first is the review, looking backward to trace how we got to this state. The second is looking forward trying to figure what it means to be here. One final rearward assessment is required so as to frame how we view what comes next. As I suggested earlier this week, the so-called output gap started at the trough of the Great...

In the middle of 1919, the United States was beset by a great many imbalances. Having just conducted a wartime economy, almost everything before then had been absorbed by the World War I effort. With fiscal restraint subsumed by national emergency, inflation was the central condition. Given that the Federal Reserve was by then merely a few years old, no one was quite sure what to do about it. Chairman of the Federal...

The cruelest part, perhaps, of this economic condition globally is how it plays against type. In all prior cycles, economies of all kinds and orientations all over the globe would go into recession and then bounce right of it once at the bottom. It was often difficult to see the bottom, of course, but once recovery happened there was no arguing against it. Since the Great “Recession”, which was global, no matter what...

Both Chinese PMI and the producer price index (PPI) are in deflation since 2012. This opens a lot of questions about the sustainability of Chinese economic growth, but also about the certain economic theories that consider deflation as a precursor of depression, as it did in the early 1930s. China’s speed of economic growth simply slows, recently to 7%, according to China statistics “China’s Economy Showed Moderate but Steady Growth“. Notice For the second year producer prices remain...