A new economic research paper argues for a model that would both explain the surge in inflation but also the ability for central banks to tame it without…
The New Deal and Recovery, Part 12: Fear Itself SHARE This great Nation will endure as it has endured, will revive and will prosper. …[T]he only thing we have to fear is fear itself. FDR, in his first inaugural address. There is no place for industry; because the fruit thereof is uncertain. Thomas Hobbes, on the state of nature, in
Leviathan.
Not the Sum of its Parts
So far, I ve tended to look at the New Deal as a set or sequence of distinct government policies and programs, remarking on how each either contributed to or hampered economic recovery. I ve also dealt only with those New Deal policies generally understood to have had promoting recovery as their aim.
Increases in the retirement age will be “crucial” to counter secular stagnation in the eurozone, according to Oxford Economics lead economist Daniel Harenberg.
Speaking during a Statec event on Friday, Harenberg presented his white paper on “Stagnation in the Eurozone”. The findings extend the work of Gauti Eggertsson, Neil Mehrotra and Jacob Robbins which used a New-Keynesian framework but introduced an overlapping generations structure to it and apply the model to the eurozone.
Harenberg concluded that the eurozone is indeed in secular stagnation due to several forces producing a “perfect storm to push interest rates to zero.”
Among the most important force at work is a lower fertility rate and the changes required to get interest rates to return to normal are “daunting”, according to Harenberg, who adds: “We estimate that the total fertility rate would need to go from its current value of 1.5 to 1.8 for real interest rates to rise to -1%.”