>> Click Here for Historical Wall Post Listing <<
Econintersect: Every day our editors collect the most interesting things they find from around the internet and present a summary "reading list" which will include very brief summaries of why each item has gotten our attention. Suggestions from readers for "reading list" items are gratefully reviewed, although sometimes space limits the number accepted.
Let's all party like it's 2008!
A longer time-frame makes it clear that the long-term trend in healthcare cost growth has been down, with shorter intervals of regression upwards. This decline in general follows the trend of long-term moderation of overall inflation, but is steeper (not shown on graph). The two graphs we have shown here make it clear that both Furman and Colburn are blowing political smoke ('where the sun don't shine').
Even the Kaiser Foundation study cited by Colburn is guilty of taking a few economic cycles and projecting a generalization of those correlations to projecting a general condition. The Kaiser generalizations that inflation and GDP growth (both by fairly complicated relationships) are "highly predictive of the growth in health spending in any given year" is at best a hypothesis and not a proof. The data set is simply too small and the complex data arrangements used are too indirect for establishing an economic law.
Nasser points out that a forgotten (by many) claim by Keynes that a steady state can be achieved at any level of unemployment. He discusses the example of 30% unemployment. Once that condition is acknowledged then the cure for secular stagnation is clear: there must be a demand stimulus. (A supply stimulus won't work because it would fall on empty demand.)
The author doesn't use the term "employer of last resort" but that is essentially what he proposes, along with the government as the "investor of last resort" - again an Econintersect supplied term.
If an unsatisfactory equilibrium is established then Nasser maintains the government must provide the shock to move away from the "secular stagnation" point in the desired direction (toward increased employment).
Econintersect Behind the Wall
|.... and keep up with economic news using our dynamic economic newspapers with the largest international coverage on the internet|
|Asia / Pacific|
|Middle East / Africa|
This Web Page by Steven Hansen ---- Copyright 2010 - 2017 Econintersect LLC - all rights reserved