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Making-up a long-winded inflation story

Nouriel Roubini writes “The Mystery of the Missing Inflation”: In the United States, Europe, Japan, and other developed economies, the recent growth acceleration has been driven by an increase in aggregate demand, a result of continued expansionary monetary and fiscal policies, as well as higher business and consumer confidence. Because stronger demand means less slack
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Stormy waters ahead for the UK, and we don't mean Brexit

Today’s announcement that the Bank of England wouldn’t be raising rates was accompanied by a hawkish statement that they may well rise soon. The additional confirmation of hawkishness was a surprise, following the BoEs hawkish reaction to the higher than expected CPI numbers for July released earlier in the week. This is bad news for the UK given that
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How Monetary Policy Determines Housing Prices

That there are asset-bubbles in the U.S., blown by the Federal Reserve, is an ongoing boogeyman erected and genuflected to by the tight-money crowd. As we can see from the chart below, San Francisco and Houston operate under different monetary authorities. Prices have exploded in San Francisco over the years, and done very little in
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Helicopter drops, or perhaps better defined, “money-financed fiscal programs” have never garnered much support among orthodox U.S. macroeconomists; indeed the success of Japan Finance Minister Takahashi Korekiyo in ending the Great Depression in Japan through helicopter drops is all but untaught in American universities. There are exceptions. Of late, highly regarded Columbia scholar Michael Woodford
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You can make a lot of money betting against U.S. President Trump, who seemingly never misses an opportunity to miss an opportunity But with the announced mid-October resignation of U.S. Federal Reserve Vice Chairman Stanley Fischer, Trump has a chance to do what Presidents Obama and Bush never did: appoint growth-oriented members to control nation’s
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The “growth-inflation” myth is alive and well

The WSJ writes The Market’s Big Puzzle: What Is Happening to Growth and Inflation? The world’s major nations are reporting stronger economic growth. Yet what was once thought to be growth’s constant companion is puzzlingly missing: inflation. In this day and age, the pervasiveness of cost-push theories of inflation is surprising. Forty or fifty years
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By Patrick Minford (reposted from Brexit Central with permission) Last week, Economists for Free Trade – a 16-strong group of experienced UK applied economists, which I chair – issued the opening parts of its report on the economic future after Brexit. My introduction to the report was greeted with warm and sometimes abusive disagreement from some quarters. This deserves
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Central Banks hide their incompetence

Heard at Jackson Hole: The cyclical recovery was gathering both pace and geographical breadth, thanks in part to the stimulus efforts of central bankers, the European Central Bank president said, adding that even if inflation remained low, the euro area economy was “gaining ground”. Maurice Obstfeld, chief economist of the International Monetary Fund, said in
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Maybe it is all just a blip and it will settle back down to normal. Certainly, the markets are not betting on a surge in nominal growth when you look at FX, bond and equity markets. In fact, the surging EUR indicates money is tightening. Draghi tried to talk down the currency a few weeks
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