Pain without Purpose
Today, nominal demand is 8% below the pre-recession trend, inflation is low, and unemployment rates in the North Atlantic region are higher than credible estimates of the sustainable rate. So why are politicians in Europe and the US, who should be worried about their electoral prospects, clamoring to enact policies that would reduce output and employment in the short run.
https://prosyn.org/VIwiuXE
BERKELEY – Three times in my life (so far), I have concluded that my understanding of the world was substantially wrong. The first time was after the passage in 1994 of the North America Free Trade Agreement (NAFTA), when the flow of finance to Mexico to build factories to export to the largest consumer market in the world was overwhelmed by the flow of capital headed to the United States in search of a friendlier investment climate. The result was the Mexican peso crisis of later that year (which I, as US Assistant Secretary of the Treasury, had to help contain).