Political Economy

This post was first published on Patreon on 22 Jun 2018 I was just having an email exchange with Marshall Auerback and a hedge fund friend of ours about immigration. And I thought I would share some of my thoughts on this given what's…

The crisis is that the political center continues to weaken even though Europe, at least on paper, is enjoying a broad economic expansion. 

China's membership in the WTO has been a disaster for Western manufacturing, employment and wages.

This post was first published on Patreon on 20 Jun 2018 Last July, I was in Germany for a high school graduation. And as the only American family member in attendance, I got a lot of questions about Donald Trump. What I said then was that…

In the midterms, the Democrats, on the other hand, are hoping to generate a lot of enthusiasm by being against Trump. But I am not at all convinced this will turn out negatively for Trump and the Republicans.

The Italian government will do whatever it takes to remain in the Euro. When others outside of government talk about Italexit and the like, it is meaningless. That's the message Tria is sending.

Maybe he just wants to get concessions out of the Chinese and the Mexicans and he is willing to take heat on (temporarily) damaging relationships with the Canadians. I suspect this may be what he is after.

There are reasonable scenarios in which monetary policy continues to tighten, fiscal policy does not loosen and the economic trajectory slides down into stall speed, even before the full economic impact of tariffs are felt.

At some point, the ECB will likely be called into action. And they will give Italy an ultimatum on the fiscal front, just as they did with Greece.

Fiscal policy space is limited first and foremost because of the threat of default. So governments are forced to act pro-cyclically.