One of the great post-crisis conundrums has been why, with interest rates at historic lows, debt and deficits at historic highs and, in some developed economies, unemployment at their lowest levels for decades, economic growth, inflation and wages growth have remained so stubbornly weak.US economic growth has been quite strong, in a post-crisis context, at 2.9 per cent in 2018 and, more recently, around 2.6 per cent. The US 10-year bond rate is 2.6 per cent and the two-year rate 2.5 per cent.
The question of why it should be so has become sharper recently as, while the sugar hit of the Trump tax cuts and surge in US government spending continues to course through the US economy and unemployment remains at extremely low levels, its growth is also tapering.and a steady winding down of its bloated post-crisis balance sheet.
Whether it was a cause, an influence or just coincided with structural changes within economies isn't clear but it is apparent that, despite the unprecedented stimulatory measures adopted by central banks and governments, there was a structural shift – downwards – in developed world growth. Less demand for physical capital while savings within both the developed and developing world are rising are probably part of the explanation for why investment and growth rates haven’t developed as might have been expected in a world of ultra-low interest rates and expansionary fiscal policies and why inflation rates remain so low.
Equally, simply redistributing existing wealth from the haves to the have-nots within stagnating or low-growth economies is more likely to detract from growth than generate it.
Possibly because small business owners are concentrating on preserving what they have, not risking capital in this new, uncertain, Central Bank era.
.There is a slowdown and a global recession looming but it is utter bullshit that 'no one knows why'!
The focus of Government spending has been 'employment' NOT improving productivity focusing on consistently spending money on building infrastructure across the country, using local people, so money has not spread at grassroots whilst the position of country improved. finance
Mmm so what do they know that we don’t ?
Could it be the rich are getting richer while the poor are getting poorer? There is no stimulation of the economy. Flat wages growth, under employment, low minimum wages are no answer for the rising cost of living. People can’t spend what they don’t have.
Because economics is a crap field that doesn't work.
StephenBartho DavidPence17 AlanKohler Peak conventional oil 2007/08 (Saudis could not increase crude production) = oil price shock = financial crisis = more debt = peak debt = end of debt driven growth, globalization etc. Matthew Simmons was right: Twilight in Desert
Every MMT economist across the planet plus their supporters ( like me) have a fair idea
Debt peaked? Ie more debt not producing growth like it has over the past ~30 yrs. what’s the next big innovation break through to spark growth?
Cheap money being invested in non productive assets being propped up by even cheaper money. Rinse and repeat. auspol assets ASX FrankingCredits InterestRate markets
Greed.
₿
Many people know why, the establishment just doesn't like the answers. auspol outsourcing immigration 1%
Trickle down economics don’t work is why!!!!!
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