The Perfect Macro World 2017/3/3
I read the following:
'A year or so ago, the world economy, seemed marred in secular stagnation. Here is Gavyn Davies from the FT:
China, Japan and the Eurozone were in deflation, and the US was being dragged into the mess by the rising dollar. Global recession risks were elevated, and commodity prices continued to fall. Fixed investment had slumped. Productivity growth and demographic growth looked to be increasingly anemic everywhere.'
I seriously wonder whether this is a piece written by someone in the moon. If you go to seminars or read macroeconomic models nowadays, it's always a perfect world, Alleluia! Does this type of "equilibrium" have any relevance whatsoever with the society and with the world? Unfortunately lots of policies rest on those models, which reflect only one quickly passing instant of "equilibrium" among all sustained and on-going destruction/creation chaos. The famous "ceteris paribus" does not have to worry about distribution imbalance, but that's not what the real world is. We are all heading down to the path of eating Marie Antoinette's cake.
'A year or so ago, the world economy, seemed marred in secular stagnation. Here is Gavyn Davies from the FT:
China, Japan and the Eurozone were in deflation, and the US was being dragged into the mess by the rising dollar. Global recession risks were elevated, and commodity prices continued to fall. Fixed investment had slumped. Productivity growth and demographic growth looked to be increasingly anemic everywhere.'
I seriously wonder whether this is a piece written by someone in the moon. If you go to seminars or read macroeconomic models nowadays, it's always a perfect world, Alleluia! Does this type of "equilibrium" have any relevance whatsoever with the society and with the world? Unfortunately lots of policies rest on those models, which reflect only one quickly passing instant of "equilibrium" among all sustained and on-going destruction/creation chaos. The famous "ceteris paribus" does not have to worry about distribution imbalance, but that's not what the real world is. We are all heading down to the path of eating Marie Antoinette's cake.
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