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Tag Archives: Political Economy

Our over-reliance on monetary policy is the problem

I am going to argue here that monetary policy is both less effective than fiscal policy, and that over-reliance on it unnecessarily politicizes monetary policy by putting unelected officials in too prominent an economic role. I would argue that monetary policy should never be the primary macro policy driver in any economy. Yet, when you look around the world it is in almost every advanced economy. It is certainly that way in the eurozone, where interest rates are negative and the...

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Signs of recession are hitting Europe. Is the new Central Bank president up for the challenge?

By Marshall Auerback This article was originally published on AlterNet and produced by Economy for All, a project of the Independent Media Institute. We now know that there will be a changing of the guard at the European Central Bank (ECB) in October. The current head of the International Monetary Fund (IMF), Christine Lagarde, will succeed current ECB President Mario Draghi at that time. A known quantity among the political and investor class of Europe, Lagarde seems like a safe...

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US GDP report puts nail in the coffin for the recession story

The latest US GDP report was just released showing the US economy expanded at a 2.1% annualized rate in the second quarter of 2019. This was marginally better than expectations for a 1.8% increase, and significantly above the Atlanta Fed’s GDPNow indicator that was showing 1.3%. The numbers are good While these numbers may be revised down somewhat in future releases, they are still much higher than one would expect in an economy where the yield curve is partially inverted and the...

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Obama the Conservative vs Trump the Revolutionary

I was thinking about this topic this morning and I wanted to run it by you. The genesis of it all was an interview I did with Rohan Grey and Kevin Muir on Real Vision regarding MMT. And one conclusion I drew – partially motivated by the debate – is that Millennials face a very different world than Gen X or baby boomers did. I think that means their receptivity to change is different. So I wanted to sketch out how I am thinking about some of these things using Obama and Trump. The...

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The Fed’s Pickle

This is a follow-up to my subscriber post from earlier today on the US economy. For those of you who are not paying subscribers, let me summarize the post by saying I think the US economy is slowing but not in a recession. Nevertheless, I think we are likely to see a recession before the end of 2020. That’s actually my base case. The obvious questions regard policy responses, particularly the Fed’s. So I am writing this post to address some of that. 50 basis points won’t happen A...

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