Tag Archive: US

Labour Productivity, Taxes and Okun’s Law

2016-09-04

by

2016-09-04

The great “science” of economics once discovered an empirical relationship between GDP and unemployment that has been dubbed Okun’s Law. It simply states that the unemployment rate rises as GDP contracts, or vice versa, as production shrinks less peo...

Read More »

Mission Creep – How the Fed will justify maintaining its excessive balance sheet

2016-08-30

by

2016-08-30

FOMC have changed their normalizing strategy several times and we now see the contours of yet another shift. The Federal Reserve was supposed to reduce its elevated balance sheet before moving interest higher as it would be impossible to increase the fed funds rate in the old fashioned way when the market was saturated with trillions of dollars in excess reserves.

Read More »

Stupid is What Stupid Does – Secular Stagnation Redux

2016-08-17

by

2016-08-17

Which country, the United States or Japan, have had the fastest GDP growth rate since the financial crisis? Due to Japan’s bad reputation as a stagnant, debt ridden, central bank dependent, demographic basket case the question appears superfluous. The answer seemed so obvious to us that we haven’t really bothered looking into it until one day we started thinking about the demographic situation in the two countries.

Read More »

The FOMC Butterfly that Will Ruin the World

2016-07-30

by

2016-07-30

Given the fact that the core CPI is currently over the arbitrarily set 2 per cent target unemployment below what the FOMC regards as full employment and GDP running at a rate far above the Federal Reserve’s own estimates of so-called potential; you would say the Federal Funds rate would be in the vicinity of five per cent.

Read More »

Great Graphic: How the US Recovery Stacks Up

2016-07-27

by

2016-07-27

The US recovery may have surpassed the 2001 recovery in Q2. Though disappointing, the recovery has been faster than average from a balance sheet crisis. Although slow, it is hard to see the secular stagnation in the data.

Read More »