by So the BLS has the new job numbers for March. Recovery continues at slow pace, as expected. 98k jobs created, considerably below the 200k average of the last couple of years, and unemployment rate reduced to 4.5% with the participation rate up a little bit, but still below its previous peak, at 63% of the labor force. The danger is that many more will suggested that we are now below the natural rate of unemployment (yes, that is a very problematic concept, something discussed here many times, too many to link). The figure above uses the data on the natural rate from the Congressional Budget Office (CBO).The danger is that because of this view that the labor market is too tight, we end up hiking the rate of interest too much, and at the same time if Trump does not come up with his promised fiscal stimulus and spending on infrastructure we might have just monetary contraction with no significant fiscal stimulus (I'm sure he will reduce taxes for the wealthy, but I wouldn't hold my breadth for the expansionary effects of trickle-down economics). And that might be how we end up having a Trump recession. To be seen.
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Matias Vernengo considers the following as important: Employment, Natural Rate
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The danger is that because of this view that the labor market is too tight, we end up hiking the rate of interest too much, and at the same time if Trump does not come up with his promised fiscal stimulus and spending on infrastructure we might have just monetary contraction with no significant fiscal stimulus (I'm sure he will reduce taxes for the wealthy, but I wouldn't hold my breadth for the expansionary effects of trickle-down economics). And that might be how we end up having a Trump recession. To be seen.
There will be a lot of postmortems for the European Union (EU) after Brexit. Many will suggest that this was a victory against the neoliberal policies of the European Union. See, for example, the first three paragraphs of Paul Mason's column here. And it is true, large contingents of working class people, that have suffered with 'free-market' economics, voted for leaving the union. The union, rightly or wrongly, has been seen as undemocratic and responsible for the economics woes of Europe.
The problem is that while it is true that the EU leaders have been part of the problem and have pursued the neoliberal policies within the framework of the union, sometimes with treaties like the Fiscal Compact, it is far from clear that Brexit and the possible demise of the union, if the fever spreads to France, Germany and other countries with their populations demanding their own referenda, will lead to the abandonment of neoliberal policies. Aust…
The economy in Venezuela has collapsed (GDP has fallen by about 14% or so in the last two years), inflation has accelerated (to three digit levels; 450% or so according to the IMF), there are shortages of essential goods, recurrent energy blackouts, and all of these aggravated by persistent violence. Contrary to what the press suggests, these events are not new or specific to left of center governments. Similar events occurred in the late 1980s, in the infamous Caracazo, when the fall in oil prices caused an external crisis, inflation, and food shortages, which eventually, after the announcement of a neoliberal economic package that included the i…