
Coming into Jackson Hole, economists are grappling with a major issue - yasp
https://twitter.com/LHSummers/status/1164490326549118976
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skybrian
That's pretty vague.

Does "assuring adequate demand" mean encouraging people to spend?

(If so, it seems like there are two ways to do it: governments can give money
to people who will spend it, or they can spend it themselves.)

re: "Obviously fiscal policy needs to be a major focus, especially given what
low or negative interest rates mean for the sustainability of deficits." \-
does this mean: governments, it's okay to spend more money?

re: "But the level of demand is also influenced by structural policies: e.g.
pay-as-you-go social security, higher retirement ages, improved social
insurance, support for private infrastructure investment, redistribution from
the high-saving rich to the liquidity-constrained poor." \- is he saying there
should be more or less of these things?

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StanislavPetrov
The crux of the problem is that central banks have been trying to encourage
"aggregate demand" by lowering interest rates to incentivizing people and
businesses to borrow (and spend) money. Now we're at the point where many of
our institutions and most of our population is drowning in debt and our
interest rates are already close to zero.

It seems pretty obvious that massive wealth accumulation by the upper
millionith of society precludes any solution. The only way to increase
"aggregate demand" is if the people have money to spend. Real wages have been
stagnant or falling for ~15 years and debt levels are at record highs. Cost of
living increases (healthcare, food, education, housing, insurance) rise
greatly each year, outpacing both stagnant wages and official inflation
numbers.

We're playing a game of monopoly where a couple of people already own every
property and have them all stacked with houses and hotels. The rest of the
players are trying to circle the board and collect their $200 from passing go
and praying to god they don't land on a property that will bankrupt them
completely before they make it around the board again. This economic system is
not sustainable.

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imtringued
So far central banks have managed to achieve almost every goal they set for
themselves. Lowering interest rates caused inflation in house prices. QE
caused inflation in the stock market. The economists working there aren't
stupid, they have every right to pat themselves on the back. Consumer price
inflation wasn't really a goal. Their monetary expansion program never
involved any consumers. Therefore expecting consumer inflation is very
unreasonable.

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melling
Larry Summers is giving an entire economics lecture on Twitter.

