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Entries Tagged as 'Economic Policy'

The Unending Artificial Boom

December 18th, 2019 · Comments Off on The Unending Artificial Boom

Austrian economics invariably predicts gloom and doom as a result of policy intervention, which by definition create “artificial” booms and bubbles. Events on the ground have forced even some of its proponents to now admit that these can last much longer than many thought. However, we don’t need the Austrian perspective for that insight, and […]

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Tags: Economic Policy · Economics

The Big Fiscal Stimulus Coming From The EU

September 1st, 2019 · Comments Off on The Big Fiscal Stimulus Coming From The EU

Countries with very large current account surpluses like Germany and the Netherlands save too much and invest too little, risky when growth slows. Add to that negative yields, budget surpluses, the impotence of monetary policy and the eurozone adjustment burden and the case for fiscal stimulus becomes extraordinarily compelling. Luckily enough, there are signs policymakers […]

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Tags: Fiscal policy

When Hard Money Men Turn Soft

July 16th, 2019 · Comments Off on When Hard Money Men Turn Soft

On the right, economic orthodoxy (sound money, sound public finances and free trade) which was defended vigorously a decade ago when it was less helpful are shredded with amazing ease. On the left, always more open to forms of stimulating the economy, many embrace MMT and a really ambitious increase in public spending. When even […]

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Tags: Economic Policy

Bring On The Powell Put

November 27th, 2018 · Comments Off on Bring On The Powell Put

From the President down, with markets bleeding, market observers are clamoring for the Fed to lower rates – or at least not raise them further. There are some economists, like Martin Feldstein, who argue that the Fed should simply ignore this noise and keep on raising rates. The thought is that rates should be considerably […]

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Tags: Economic Policy

Deregulation Isn’t Always Pro-Growth, Even When It’s Pro-Business

October 30th, 2018 · Comments Off on Deregulation Isn’t Always Pro-Growth, Even When It’s Pro-Business

Deregulation is often believed to spur economic growth and therefore be business and shareholder friendly. However, there are instances where it is indeed business and shareholder friendly, but not market friendly, as it can confer market and pricing power to insiders. So once again, we have to stress the difference between market friendly and business […]

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Tags: Economic Policy

Perennial Tax Cuts

October 24th, 2018 · Comments Off on Perennial Tax Cuts

Tax cuts are seen by some as the necessary, indeed almost the only instrument for economic growth. A sort of magical formula for all times and circumstances. The resulting deficits should be met with public spending cuts, so the agenda really is shrinking the state. This overlooks large distributional consequences, and there is little to […]

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Tags: Economic Policy

Countries Are Not Companies

June 19th, 2018 · Comments Off on Countries Are Not Companies

The US has some legitimate concerns about some trading partners, but the way it’s going about trade negotiations is deeply flawed. Large parts of the US trade team seems blissfully unaware of basic facts or the elementary determinants of trade flows and balances. It’s difficult for negotiating partners to deal with that and the fallout […]

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Tags: Economic Policy

Another Own Goal?

April 18th, 2018 · Comments Off on Another Own Goal?

The trade tensions between the US and China are heating up. Much of the US focus is on Chinese efforts to expand in high-tech industries in general and optical networking industries in particular. Hence, the US is putting sand in the wheels of the expansion of important Chinese companies like ZTE and Huawei. But these […]

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Tags: Economic Policy · Economy

The U.S.-China Race To Lead The Fourth Industrial Revolution

April 11th, 2018 · Comments Off on The U.S.-China Race To Lead The Fourth Industrial Revolution

The US Administration has reacted with alarm about China’s (2015) ambitious plan to develop industries of the future (China 2025). It is threatening China with trade sanctions, mostly targeted at thwarting, or at least slowing down these Chinese ambitions. But these Chinese ambitions aren’t anything out of the ordinary. They follow logically from their economic […]

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Tags: Economic Policy

An Unexpected Tax Cut Bonanza

December 26th, 2017 · Comments Off on An Unexpected Tax Cut Bonanza

The Trump tax cut could produce more economic stimulus than many economists (ourselves included) expected. This could occur if others copy the example of several big corporations that announced they will share their tax bonanza with employees. Given the increasing gap between employee compensation and productivity growth, it’s about time, as such a model isn’t […]

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Tags: Economic Policy · Voodoo economics