The Economist offers a special report that the new normal state of economic affairs shines fresh light on the division of labor between central banks and governments.

Jonah Whanau

2019-11-15 13:34:00 Fri ET

The Economist offers a special report that the new normal state of economic affairs shines fresh light on the division of labor between central banks and governments. The recent U.S. economic outlook combines full employment with low inflation, and this rare combination accords with the Federal Reserve dual mandate of maximum sustainable employment and price stabilization. The New Keynesian Phillips Curve becomes flat in recent times, and there is no inexorable trade-off between inflation and unemployment. The U.S. unemployment rate reaches 3.5% or the lowest level since 1969. The core inflation rate hovers in the range of 1.5%-1.7% or well below the 2% target inflation rate. On the one hand, the Federal Reserve may continue to reduce the interest rate to help sustain the U.S. economic expansion and stock market rally in response to a vocal president.

On the other hand, the dovish interest rate cuts suggest that the U.S. central bank may have fewer monetary policy levers to cope with the next economic recession. Meanwhile, U.S. Treasury continues to offer Americans fiscal stimulus packages in the generic form of both tax incentives and infrastructure expenditures. Whether fiscal deficits can cause higher inflation remains a major economic policy concern.

 


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The Economist delves into the modern perils of tech titans such as Apple, Amazon, Facebook, and Google.

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European Central Bank designs its current monetary policy reaction function and interest rate forward guidance in response to low inflation.

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2019-04-11 07:35:00 Thursday ET

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Eric Posner and Glen Weyl propose radical reforms to resolve key market design problems for better democracy and globalization.

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President Trump's current trade policies appear like the Reagan administration's protectionist trade policies back in the 1980s.

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Stock Synopsis: With a new Python program, we use, adapt, apply, and leverage each of the mainstream Gemini Gen AI models to conduct this comprehensive fundamental analysis of Palantir (U.S. stock symbol: $PLTR).

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