21–30 of 116 posts
It's great there isn't a "consensus" between economists, otherwise if that consensus was wrong we would never be able to leave it, like what happens in other sciences.
"Economics is a highly sophisticated field of thought that is superb at explaining to policymakers precisely why the choices they made in the past were wrong. About the future, not so much." -- Ben Bernanke, 2013 (the quote is from an unexpectedly funny and thoughtful commencement speech) https://www.youtube.com/watch?v=Ww6guPQsKQo http://money.cnn.com/2013/06/02/news/economy/bernanke-prince...
https://rwer.wordpress.com/2013/11/09/the-scientific-illusio...
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Yeah, well, hold on to your hat.
Japan style stagnation seems like the most likely outcome to me, what's your prediction?
I'm not sure what will be the trigger, they seem to be pushing at several angles - war, knock-on effects from environmental collapse, another financial implosion. Because of the systemic corruption of the Democratic Party, the collapse could emerge organically. Obama really only papered over the root causes of the financial crises (not to mention paying off the culprits).
But it's a unlikely you're going to see Japanese style stagnation. Their economic circumstances are a result of the U.S. propping up their economy through an export regime for the sake of regional national security, as well as an economic approach that (generally) pursues a more stable state than dramatic rises and falls. The U.S has neither of those preconditions. Contemporary Russia is probably more instructive generally, with perhaps Central American style inequality being exemplary for the coastal regions.
[0] https://www.google.com/amp/s/amp.ft.com/content/06d6bf9e-fab...
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Why not? Minimising these impacts it's about finances, not economics. I.E Economics is about predicting these things (which they absolutely didn't), finances is about putting mechanisms in place so that if they happen they will be minimised.
The vast majority of economics is not macroeconomic forecasting. That's somewhat akin to saying that computer science is about making email work.
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Yeah, well, hold on to your hat.
Japan style stagnation seems like the most likely outcome to me, what's your prediction?
"When a measure is used as a target, it ceases to be a good measure."
My impression is that economics as a whole does not understand this. When you target GDP for example, GDP ceases to be a good measure of anything. The trouble with economics as a science is that its results are used to guide the economy. This creates a feedback loop, making it essentially a self-invalidating discipline.
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We have this big problem. We'll just patch over it with this other problem and call that a reasonable strategy.
I think what he's suggesting is that paying down debt through austerity can be more costly than growth, since austerity hurts growth. The trick is, where does growth come from?
Great Depression: industrial production in the United States declined 47 percent and real gross domestic product (GDP) fell 30 percent. In comparison 2010-2014 was a minor blip, with less than 3% GDP drop, that barely qualifies as a correction. I fear central banks have actually gotten to good at minimizing these issues as we could easily do the same thing in another 10 years, where the great depression created far m…
The hard part about economic analysis is you can never know all the variables in a dynamic system. It's a common error to summarize based on variables convenient to the theme you choose to present only to later realize your analysis should have included some fairly obvious factors.
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I think what he's suggesting is that paying down debt through austerity can be more costly than growth, since austerity hurts growth. The trick is, where does growth come from?
The mistake there is thinking printing money brings you growth. Where has this worked?
1) Government/central bank spend more than they take in taxes.
2) Private banks make loans to private sector (biz or individuals).
Money is destroyed by government running a surplus or by loans being repaid.
Note also that for the government to run a surplus the private sector must run a deficit (decrease savings or increase borrowing) in most circumstances.
The question is where money should be created and how it should be managed and controlled.