So the big lesson is simple: trust those who work in the tradition of Walter Bagehot, Hyman Minsky , and Charles Kindleberger. That means trusting economists like Paul Krugman, Paul Romer, Gary Gorton, Carmen Reinhart, … [...]
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… in McKinsey's baseline suggesting that the world, most likely, could experience a long deflationary period although, in our opinion, not a Japanese -style one due to Japan's unique demographics, banking and government … [...] He then attempts to combine the Austrian cycle, Minsky's financial instability hypothesis, and debt- deflation theory into one theoretical construct, “with debt and its magnifying power as the primary drivers of the cycle” (pg. [...] Surely the East Asian Financial crisis and some of Japan's zombie debt (home grown financial crisis) coming home to roost was a far more likely cause of deflation ? Anyway, Japan grew through the middle of the 2000s only to … [...] Secondly, and more importantly, he believed that the failure to end deflation in Japan did not necessarily reflect any technical infeasibility of achieving that goal. Rather, it was a by-product of a longstanding political debate … [...] It is well known, and it has been discussed in this blog, that the crisis has been to a great extent associated to the fact that wage stagnation has led to the accumulation of increasingly more unsustainable levels of private debt (echoes of both Godley and Minsky , from the Levy Institute). … The main difference between the current Great Recession with the previous two recessions is that private debt falls (below the zero line) as a result of deleveraging (debt- deflation [...] Watch Out For More Deflation . Posted by Jeff Carter; on June 26th, 2012. One of the consequences of all the stimulus and subsequent QE is that long time traders of our markets know they are screwed up. Consistent printing of money and 0% interest rates world wide have created their own economic imbalances. As the saying goes, there is no free lunch. Economists such as … The whole world has become Japan . Follow me on Twitter, Like PnF on Facebook. Thanks for the link … [...] The best guide to what is happening comes from Hyman Minsky . … “Eventually, however, a ' Minsky moment' occurs. … The risk from a second Minsky Moment is thus even higher than in 2008. … crud (1), crude oil (2), crude oil prices (28), Currencies (240), currency (1), debt (4), defaults (2), deflation (1), demographics (1), depression (1), diesel (1), Dow Chemical (1), DuPont (1), ECB (3), Economic growth (1155), economics (1), EPCA (1), ePolyethylene (1), ethane (2) … [...] |
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Guest Post: Whitewashing The Economic Establishment | ZeroHedge
DeLong is, in my view, trying to whitewash his contemporaries who did not see the crisis coming, and inaccurately trying to associate them with Hyman Minsky whose theory of debt deflation anticipated many dimensions of the … [...]