Finn Kydland and Edward C. Prescott (KP), the 2004 Nobel laureates in economics think that technological shocks can explain 70 percent of economic fluctuations in postwar US data. Unfortunately their quantitative methods are simplistic and ignore the real problem: central banking.
The coronavirus crisis must cause us to rethink the idea governments can manage these situations. It is absolutely true that most private industry can be trusted, because the alternative for poor or unscrupulous providers is failure.
Real wages in Japan have been declining thanks to decades of expansionary monetary and fiscal policies. Now "Japanization" increasingly looks like a fate that awaits Europe.
Eurocrats might be able to get tables in their favoured restaurants more easily while national governments take it on the chin. But this is a temporary situation which could easily evolve into a threat against the union.
"Financialization" is the process by which a normal economy is transformed into a fragile economy centered around financial firms. Central banks and government bailouts are to blame.
Sinister forces in American political life are using the coronavirus crisis to incite war with China and to stir up bad feelings toward the Chinese people. But war with China should be the last thing people want.
These famed "tools" of the central bank are nothing but cunning and arcane techniques for conjuring additional trillions of dollars out of thin air and pumping them into the global economy.
The money supply metric is following the usual pattern that precedes a recession and economic crisis.
As the member states of the EU begin to shut their internal borders to their neighbors, we're reminded that state-to-state open borders in a place like the US do come with a downside.
By announcing that it is willing to throw up to $1.5 trillion in electronically created money in order to give three-month loans to those institutions that bought Treasury debt earlier, the Fed is bailing out not only the holders of Treasury debt, but also the Treasury itself.
