Wednesday, February 24, 2016

Helicopter drops -- a potentially temporary respite to longer term stagnation

For the whole article, go here.
It has been argued for as long as this blog has existed that following the global financial crisis of 2008 there would not be a return to rate normalization. In the absence of meaningful real wage increases for the masses, and the added onus of an ever expanding wave of retirees being ostensibly supported by an ever shrinking bracket of working age individuals, helicopter drops courtesy of central banks would provide an albeit temporary catalyst to growth. Political economy trumps economics. There are serious distributional aspects that are not being addressed and these will be exacerbated by technological advances and shifts.