The Old Order Changeth, Alas

Just when economists thought we had begun to understand how to develop policies that might keep the US economy on an even keel, reality bit. Start with inflation. When the economy reaches full employment, wages will begin to rise and push up prices, triggering inflation at an annual rate higher than the 2% the monetary […]

A Failure of Pedagogy

From Alexandria Ocasio-Cortez to Donald J. Trump, our political class is profoundly ignorant of basic economics. We economists, especially those of us who have had some responsibility for educating students, have a lot to answer for. Presumably all the politicians strutting across our television screens did attend some sort of educational institution at one time. […]

The Hottest Economy Anywhere In The World

Two of the world’s most powerful players celebrated last week, one his country’s New Year, the other his substantial policy achievements. China’s president Xi Jinping was celebrating the arrival of the Year of the Pig, America’s President, Donald Trump, his substantial achievements on the economic policy front during the year of, well, of the Donald. […]


There are now some $247 trillion in IOUs from governments, businesses and households sitting out there in the world economy. That’s over three times the value of all the goods and services produced by all of the world’s economies combined. The size of America’s government debt tops its GDP, a level that scholars say is […]

A Slowdown, But No Recession

Late last year some 800 CEOs surveyed by The Conference Board ranked fear of a recession in 2019 19th on their list of 28 worries. Last week they ranked it first, blaming not economic but geopolitical events – collapse of the world trading system, political instability – for the construction of a new wall, this […]

Angst Down, Calm Up

In the relatively short period of a few weeks the mood here has changed from somewhere between gloom and panic, to somewhere between calm and optimism. For several reasons, first among them the President’s tweets that progress is being made in negotiations to end the trade war with China. Indeed, so promising are the results […]

Jobs Boom, Markets Stagger, Fed Remains Flexible

The jobs boom rolls on. In December the economy added 312,000 jobs, almost twice as many as forecasters expected. Good prospects converted so many couch potatoes into job seekers that the unemployment rate rose from 3.7% to 3.9%. Average hourly earnings rose, and are now 3.2% over last December, with much of the increase coming […]

The Year of Dichotomies Winds To Its End

‘Twas the night before Christmas and all through Asia America increased its exports – of panic. President Trump, whose tariffs many Asian policymakers feared would derail their economies, attacked the Federal Reserve’s chairman, blaming him for turning the man who appointed him into “another Hoover”. Another Great Depression in store? This, after treasury secretary Steven […]

The Fed Raises Interest Rates and Hackles

“Everybody says don’t … it isn’t right; Don’t, it isn’t nice,” wrote Stephen Sondheim for one of his musicals. A diverse chorus sang those lyrics to Federal Reserve Board chairman Jay Powell. From the center-left of the choir Powell could hear Larry Summers, Bill Clinton’s treasury secretary, “I do think that there are more risks […]

The Big Danger to the Trump Economy Is Trump

The fundamentals are still strong. But the stock market collapse is on the president’s thumbs. Share-price volatility is the price we pay for a tweet-driven, rather than a performance-driven, stock market. Especially when the tweeter is capable of a triumphant announcement one day that his tariff war might be ending because he has brought Xi […]