economics

but it is just as correct, and probably more so, to say that foreign accumulations of dollars force Americans to consume beyond their means.

In the short run, this policy orthodoxy achieved its stated goal, but in the longer run it acted to block the natural process of restoring robust finance, with the consequence that an increasingly fragile financial structure served as an increasing obstacle to capital investment and hence also to robust economic performance. Because of government

In practice, except for the revenue deficit grants, the actual flow of funds remained generally less than recommended amounts by the end of the award period, which indicates that the revenue deficit grants were predictable and assured while others were not. Some conditional grants for local governments faced challenges of conditionalities and

Because it will be almost impossible to do these quickly, as a stopgap countries with productive investment opportunities must seize the initiative in a global New Deal to keep demand high as the structural distortions that force up the global savings rate are worked out.

The reverse repo facility has been flat lately, and there’s still $433 billion in it. The big draining of the reverse repo facility from over $2 trillion in May 2023 to the current low levels was the main reason why the Fed was able to keep performing quantitative tightening without causing further liquidity problems in the banking system.

The Triffin Dilemma Unfolds

In the 1960’s, economist Robert Triffin noted that global reserve currencies have to run large persistent trade deficits, which has been coined the Triffin Dilemma. If the reserve country doesn’t supply the world with a lot of their currency, then the world simply can’t use that currency for international trade, commodity

When the bond market entered its golden era and became known as smart money, the U.S. federal debt-to-GDP ratio was only about 30%. That was a small and nimble market, and one that was effectively priced by professional traders.

Option 1: The optimistic scenario

Technology continues to do what it has done for more than a century: create new jobs. Meanwhile, AI lowers the barrier to entry, more people can become knowledge workers, and knowledge work itself becomes democratized. The economic pie grows and everyone gets a bigger slice. As more people join the ranks, the

•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.