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The accounting adjustment to remove five zeros from Venezuela's currency is part of President Nicolás Maduro's "economic expansion and recovery" plan.

[OP-ED]: El gran debate de Trump sobre el crecimiento económico

 08/15/2017 - 10:01
No hay suficiente dinero para satisfacer todas nuestras demandas, incluso a tasas más altas de crecimiento económico. Habrá conflictos entre gastos privados y gubernamentales; entre gastos nacionales y locales; entre gastos de salud y gastos de no-salud; y entre gastos dedicados a los ancianos versus los jóvenes. El presente es polémico; el futuro quizás sea peor.

La discusión entre el gobierno de Trump y sus críticos sobre una tasa de crecimiento económico sostenible suscita profundas preguntas sobre el futuro de Estados Unidos. ¿Ingresamos en un período prolongado de crecimiento económico lento? Si es así, ¿cómo altera eso la sociedad y la política? ¿O acaso las medidas “correctas” elevarán el crecimiento económico a niveles del pasado?

[OP-ED]: Trump’s great growth debate

 08/09/2017 - 08:58
There isn’t enough money to satisfy all our demands, even at higher rates of economic growth. There will be conflicts between private and governmental spending; between national and local spending; between health spending and non-health spending; and between spending on the old versus the young. The present is contentious; the future may be worse.

The argument between the Trump administration and its critics over a sustainable rate of economic growth raises profound questions about America’s future. Have we entered a prolonged period of slow growth? If so, how does that alter society and politics? Or will the “right” policies raise growth to past levels? 

If you haven’t paid attention, here’s a brief overview of the debate.

[OP-ED]: Mad at everyone

 07/03/2017 - 17:41
Not surprisingly, the system has become self-perpetuating. It feeds on mutual recriminations. On this July 4, the Founders -- who had deep disagreements, but compromised -- would doubtlessly disapprove.

This is the summer of our discontent. As Americans celebrate July 4, they are mad at their leaders, mad at their government and mad at each other. A recent Pew poll finds that “public trust in government remains near historic lows.” Just 20 percent of Americans trust the government to “do the right thing just about always or most of the time.” The comparable figures were 40 percent in 2000 and almost 80 percent in the early 1960s. There has been a long-term loss of trust.

[OP-ED]: Postponing the next recession?

 06/30/2017 - 08:37
Economists from the Bank for International Settlements (BIS) in Basel, Switzerland -- a bank for government central banks -- find that the pass-through from wage increases to price increases has weakened. If this is confirmed and continues, it implies that inflation will remain tame for some time even if the economy continues to grow. EFE

This is not your father’s inflation -- and that’s good news. Business cycles often end when higher inflation causes a country’s central bank (the Federal Reserve in the United States) to raise interest rates, slowing the economy and, perhaps, triggering a recession. The good news: The next recession may be delayed, because the Phillips Curve has shifted.

[OP-ED]: America’s postindustrial blues

 06/22/2017 - 09:43
Says Richard Reeves of the Brookings Institution in his new book “Dream Hoarders.” We should not be surprised that 58 percent of whites and 67 percent of whites without a college degree voted for Trump.

Ever since Donald Trump’s election, a cottage industry of politicians, journalists, scholars and commentators has sought to understand what motivates Trump supporters. Theories have ranged from globalization to a rebellion against Washington elitism to racism. But the true cause may have been overlooked: the “postindustrial society.”

[OP-ED]: The bumpy road to adulthood

 04/27/2017 - 14:43
The Great Recession’s high unemployment surely drove many young people back to their parents. The actual number of 18- to 34-year-olds living at home totaled 24 million in 2015. Two-thirds say they’re happy with their home life. The fact that more Americans go to college and graduate school than in the past has also delayed marriage, living independently and having children.

Growing up isn’t what it used to be. There’s a yawning gap between the end of adolescence and the beginning of adulthood: a period when millions of 20-somethings and 30-somethings have many adult freedoms without all the responsibilities. Social scientists have tried -- so far in vain -- to name this new life-stage, but no one should question its significance.

Plain Text Author: 
Robert J. Samuelson

[OP-ED]: Should the Fed run the economy ‘hot’?

 03/14/2017 - 17:44
The recovery, though encouraging, is certainly no economic panacea. Mounting inequality remains a big issue. From 2000 to 2016, the best-paid 5 percent of men achieved a 30 percent wage increase, according to Bureau of Labor Statistics data analyzed by Gould. For women, the comparable gain was 24 percent.

Toward the end of 1942, Winston Churchill, in announcing a rare victory over the German army, uttered one of his more memorable phrases: “This is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.” The same might be said today of the American economic recovery. Progress, though real, is incomplete.

Plain Text Author: 
Robert J. Samuelson

[OP-ED]: Why economists can’t forecast

 03/08/2017 - 19:06
Chevron Chief Executive John Sanders Watson during the company's executive and guest visit to celebrate the 95th anniversary of its entry into the financial market on the New York Stock Exchange. EFE

You knew it all along: Economists can’t forecast the economy worth a hoot. And now we have a scholarly study that confirms it. Better yet, the corroboration comes from an impeccable source: the Federal Reserve.

The study compared predictions of important economic indicators -- unemployment, inflation, interest rates, gross domestic product -- with the actual outcomes. There were widespread errors. The study concluded that “considerable uncertainty surrounds all macroeconomic projections.”

Plain Text Author: 
Robert J. Samuelson

[OP-ED]: Two cheers for a carbon tax

 02/19/2017 - 20:55

Fossil fuels now supply four-fifths of the world’s energy, a share that has dropped only slightly since 1990. To stabilize CO2 concentrations, we must essentially stop burning fossil fuels. How is this to happen? Supporters of a carbon tax hope that the market mechanism -- higher prices for fossil fuels -- will unleash a torrent of innovation: safer nuclear, less costly solar, better batteries. This is a leap of faith. Higher prices do not guarantee technological breakthroughs.
 

By all means, let’s have a carbon tax. It’s the best way to deal with global climate change. It would require Republicans and Democrats to compromise -- a good thing -- and would provide revenues for a government that desperately needs more revenue. Fine. But let’s not pretend that a carbon tax is a panacea for either climate change or too much debt.

Plain Text Author: 
Robert J. Samuelson

[OP-ED]: Is corporate ‘short-termism’ a myth?

 02/10/2017 - 07:11
When the business climate is exceptionally uncertain, there’s a natural inclination to hold back. Whatever ails the U.S. economy, it’s a lot more complicated than selfish short-termism.

You’ve heard the criticism. Too many American corporate managers are addicted to “short-termism.” They postpone investments and other costs, sacrificing future performance for present profitability. Either they’re pressured by “activist investors” or want to inflate the value of their stock options. If true, it could help explain the economy’s lackluster performance. Now, a new study asserts that it is true.

The study is intriguing -- but be skeptical; it has some glaring weaknesses.

Plain Text Author: 
Robert J. Samuelson