In his December 15th Financial Times blog post, Larry Summers continues warming to the notion that the slow recovery stems from permanent structural problems and not a temporary Keynesian lull in demand. Presumably, then, optimal economic policy would maximize long-term private sector growth, rather than maximizing short-term growth at the expense of the long-term, in order to avoid permanent damage to the economy from a temporary lull in demand. Summers blames a ... Read More
Interest-Rate Policy and Economic Growth
Floyd Norris, in The New York Times, reports that construction is primarily responsible for slow employment growth. Meanwhile, Craig Torres and Ilan Kolet report in Bloomberg that “investment in software is up 19 percent since the 2007 business-cycle peak, while…investment in non-residential structures…is down 18 percent since the fourth quarter of 2007. Spending on equipment…is up just 2.2 percent, according to data from the Bureau of Economic Analysis. Spending on ... Read More
