Via Mish. Brad Delong opines. Delong points out the situational context of debt increases, whether your financial system is impaired or not and how these (and other things) matter. That economies will face nonlinear and potentially destabalizing threshold effects at some level of debt overhang seems to me a given. That the threshold may be different depending who you are -Japan vs Greece vs the US is so obvious as to be banal.
All western economies seem to be faced with a similar issues and constraints.
What is the role of government?
How do we deal with globalization and technological improvements?
What type of public investments should we make to promote growth in the future?
How do we design a financial system that functions as a growth channel without creating too much systemic risk?
Should Central Banks only clean up after crisises or should they lean against asset bubbles?
Does Central Bank policy itself contribute to systemic risk?
How to we properly regulate/tax business activity?
We have as a world made litle progress on these issues since 2008-2009. As they build up I see only more social upheaval for the rest of the decade.
All western economies seem to be faced with a similar issues and constraints.
What is the role of government?
How do we deal with globalization and technological improvements?
What type of public investments should we make to promote growth in the future?
How do we design a financial system that functions as a growth channel without creating too much systemic risk?
Should Central Banks only clean up after crisises or should they lean against asset bubbles?
Does Central Bank policy itself contribute to systemic risk?
How to we properly regulate/tax business activity?
We have as a world made litle progress on these issues since 2008-2009. As they build up I see only more social upheaval for the rest of the decade.
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