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Japan has put together a string of five straight quarters of real growth, along with declining unemployment and minute amounts of inflation. Some have recently termed Abenomics “a big success.” If so, then worth noting is that Abenomics’ “three-legged stool” of fiscal reform, less regulation and expansive monetary policy has so far been carried out
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The uselessness of the concept of potential output

The concept of potential output is one of the Fed´s “guiding lights”. Unfortunately, it doesn´t “illuminate” anything but dependence on it can cause grave policy mistakes. It seems, as illustrated in the charts below, that “potential” output is always “chasing” actual output. In the 90s and first half of the 00s, actual output was always
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Eric Rosengren is the Boston Fed President, and a man who has publicly fretted at the construction cranes populating his home city. True, property values have been soaring in the Boston market—witness nearby Newton, Mass., where an average home sells near a cool million. Boston is a city and region infamous for stipulations on property
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The FOMC thinks it´s coaching a “major league” economy

In a recent speech, Loretta Mester gave the impression the FOMC is dealing with a “robust or major league” economy. Excerpts from her speech, where the highlighted “descriptions” convey that view follows. She´s not alone. On the same day, San Francisco Fed president John Williams said: “Now that we’ve gotten the monkey of the recession off
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Wolfgang Schauble - the most dangerous politician in Europe

For all the column inches spilled on Le Pen, Farage, AfD, Willders, etc. etc. by far the most dangerous politician in Europe is the one who has both huge influence and completely wrong-headed ideas about monetary policy. That man is Wolfgang Schauble, Germany’s long-standing and powerful Finance Minister. At the fringes of last week’s IMF
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Did That Canary Just Topple Over?

Over at the always-trenchant Idiosyncratic Whisk, blogger Kevin Erdmann has again parsed the U.S. CPI release, and finds that shelter costs (as measured) are suddenly cooling. Of course, one month does not a trend make. But then we have indices that show that U.S.  commercial property values topped out last August. Yes, the last time
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A Fed engineered Ice-Age

In The Economy May Be Stuck in a Near-Zero World, Justin Wolfers posits: If the Fed can’t cut rates as much as required to fight a slowing economy, then recessions will become more common and more painful. It suggests an urgent need to reconsider how we will counter the next bout of bad economic news,
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