Guest blog from Mainly Macro

Tuesday, 17 March 2015

Radical macro lessons from the Great Recession

The relationship between NGDP targets, a higher inflation target and helicopter money

Just suppose that lower oil prices help generate a period of significantly above average growth in the OECD economies over the next five years. We avoid deflation, but despite more rapid growth modest increases in interest rates keep inflation at or below target. Even if this happens, the story of the Great Recession will not have been a happy one. If you compare where we are now to where we might have been without a financial crisis, there remains a huge gap. Even if we go a good way to closing that gap over the next five years, this very gradual recovery will have cost us dear. In some countries (most of the Eurozone) that cost is currently reflected in high levels of unemployment, while in others (the US) it manifests itself in real wage stagnation or decline.

For the rest of the article, click on the link below:

http://mainlymacro.blogspot.com/2015/03/radical-macro-lessons-from-great.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+MainlyMacro+%28mainly+macro%29

in the long run, we’re all dead according to Lord John Maynard Keynes

Photopoetry by Crazy Horse

all the furies

under the heavens

all the wrathful spirits

from Hades

will get dissipated

that’s the good news

the downside we must know

that will only come to pass

in the long run.

©crazyhorsepoetry

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