01-04-2017, 12:51 AM
Fairly amazing stuff this..
Businesses haven't been spending in the U.S., and it's possible that Capitol Hill dysfunction is partly to blame. A 10 percent rise in the U.S. partisan conflict index (a gauge that tracks the degree of political disagreement in the nation based on newspaper articles) results in a 0.4 percentage point increase in average cash-to-total assets above trend about one year after the shock, based on new Bank of England research. The working paper used data on cash holdings from the Compustat database for the period between 1985 and 2014.
Strife Between Democrats and Republicans Curbs Business Spending - Bloomberg
One concern that transcends borders is growing inequality: research finds that a highly uneven income distribution hurts growth. Take this recent paper, which is scheduled to be discussed at the American Economic Association's annual meetings in Chicago this weekend. Princeton University's Adrien Auclert and Massachusetts Institute of Technology's Matthew Rognlie find that a temporary boost to inequality lowers output modestly, partly because higher-income people are less likely to spend every additional dollar they earn. A permanently wider income gap can have a much larger effect on growth.
Strife Between Democrats and Republicans Curbs Business Spending - Bloomberg