economics

Emerging markets as we currently know them didn’t exist during the 1980’s dollar spike. The MSCI Emerging Market Index was created shortly afterward in 1987, and it was a small share of global GDP at the time. Developing countries of course existed during this dollar spike, but just weren’t significant players in the dollar market. So, this 1980’s

But here’s the twist: while the fiscal deficit is under control, state debts remain high. Currently, state debt is at 28.5% of GDP, far above the recommended level of 20%. High debt means states are borrowing heavily, which could become a problem if their revenues don’t grow fast enough.

I think it’s important to look at the telecom boom of the 1990s rather than the one in the 2010s, because the former led to a gigantic crash. The railroad boom led to a gigantic crash too, in 1873 ( before the investment peak on Kedrosky’s chart). In both cases, companies built too much infrastructure, outrunning growth in demand for that

We can clarify our thinking if we put our chief emphasis where it belongs—on policies that will maximize production.

•When policymakers interfere with the capital cycle, the market-clearing process may be arrested. New technologies can also disrupt the normal operation of the capital cycle.

The trends are faster in the case of weak commodity prices because the cycle will exhibit the same links, but in an accelerated manner. Producers, worried about covering their fixed costs, are incentivised to increase supply to try to get volume to overcome the price effect, further pressuring prices downward.

The theory I advance here is that

In the first half of 2025, annualized construction spending on manufacturing facilities is decreasing, not increasing, indicating that there is thus far no major investment into relocating supply chains to the United States in response to tariffs. Generally speaking, carrots (subsidies) have a bigger impulse to action than sticks (tariffs) because

To illustrate the problem of applying a microeconomic perspective to a macro situation, consider the following. As every entrepreneur knows, employee costs are a major influence on a firm’s profits. Cutting payroll expenses means a more robust bottom line. Accordingly, it is commonly believed that when firms throughout the economy hold down wages,

Here we shall have to say simply that all government expenditures must eventually be paid out of the proceeds of taxation; that inflation itself is merely a form, and a particularly vicious form, of taxation.