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…
The Fed overtightened. Now it’s behind the curve. Recession awaits
Sorry for the alarmist post title. But the Fed has completely bottled it. I've been warning for some time that it could go this way. And now, we are in in the endgame.
First, the Fed overtightened through 2018. Then, forced at gunpoint by…
Why my base case for 2020 is recession
Back at the end of July, I was talking about my macro thesis. And I led off writing this:
The US is the laggard in this slowing but is affected as well. From a markets perspective, that means a convergence to zero, with yield curves…
Competitive currency devaluation and the currency war
The US is the cleanest shirt
Last week, I was talking to Megan Greene, the former chief economist at John Hancock for an interview on the US and European economies. And she said something that resonated with me about the global growth…
The trade-currency war will crystallize downside risks
Yesterday, the overarching message of my post was this bit:
"as we think of potential outcomes, policy error has to be a real concern here, especially in 2020 once the cumulative impact of all this takes its full measure."
I don't think the…
Trade war escalation highlights downside economic risks
The big story today is the potential for a currency war, emanating from the escalating trade war between the US and China. But there's a considerable degree of data flow that I want to parse to give a more complete macro view.
Having…
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…
A variety of pre-FOMC thoughts on the economy
My macro view
What's my overall thesis at this juncture?
It's that the global economy is slowing and is likely to slow further before it picks up. The US is the laggard in this slowing but is affected as well. From a markets perspective,…
Why what economists are now saying about inflation matters
The US Personal Income and Outlays report for June 2019 came out this morning. It showed personal income increasing 0.4% and wages and salaries increasing 0.5% last month. These are good numbers. And in conjunction with a lot of other data…
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…