Barry Eichengreen: How the US Economy’s Luck Runs Out: "The weakness of wage growth is no mystery. Wage inflation is weak because labour-market slack remains greater than indicated by a 3.6 per cent headline official unemployment rate. Include also individuals with part-time and sporadic employment (“persons marginally attached to the labour force, plus total employed part time for economic reasons”), and unemployment rises to 7.1 per cent. Even now, in other words, not all those who dropped out of the labour force due to the Great Recession and the opioid crisis have dropped back in.... In addition, trade unions no longer force big US corporations to share their profits when the latter rise in expansions.... How might the current expansion end?... A geopolitical shock... the Trump Administration’s erratic foreign policies... a point where the reserve army of the unemployed is finally depleted and wages rise sharply.... What are odds of the expansion ending in the next year? Truth is that no one knows...


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