Wednesday, February 3, 2016
The End Of The New Economic Normal
A number of economists have suggested that we are in for an extended period of slow economic growth. That has become the new normal. This article argues that we are reaching the end of the new normal. He describes the headwinds that he observes and he is not optimistic about our ability to deal with them. We have relied too heavily on monetary policy, which has approached its limits, and he does believe that policy makers are prepared to do what is necessary to preserve even the new normal. He is concerned about the consequences of political dysfunction which may worsen as economic conditions deteriorate further. Its hard to observe the trends that are underway in the developed economies and remain confident about a revival in the ability of our political system to respond to a worsening economic situation.