More than Two Decades of Macroeconomic History Through the Lens of Four Key Components of Aggregate Demand
It is remarkable the extent to which you can tell the story of the U.S. macroeconomy over the past twenty-five years through the reactions of four components of aggregate demand to policies and shocks:
- The dot-com boom unleashed by the Clinton deficit-reduction program and high-tech innovation.
- The dot-com bust.
- The housing boom.
- The successful rebalancing of aggregate demand—housing sits down, while exports and business investment stand up as money flows are successfully redirected.
- The Fed well behind the financial-stability curve: the financial crisis and the collapse.
- Inadequate recovery: The Geithner Treasury and the Obama White House's failure to do anything to promote a recovery of residential construction.
- Inadequate recovery: Republican (and Obama) fiscal austerity.
- Inadequate recovery: Bernanke's highly premature taper tantrum.
- The Trump rebound.
Rebalancing Near Full Employment:
Financial Crisis and Crash:
Inadequate Recovery: Construction Stagnation:
Inadequate Recovery: Fiscal Austerity:
Inadequate Recovery: Bernanke's Taper Tantrum
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