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For years my friend Scott Sumner has been working on his book on the Great Depression. It has taken some time to get it out, but now it will soon be available (December).
I am in the US on a speaking tour at the moment so I have not had a lot of time for blogging, but I thought that I just wanted to share one alarming macroeconomic number with my readers - the sharp drop in Chinese nominal GDP growth.
A lot have been said and written about Angus Deaton who today has been awarded the Nobel Prize in Economics and I don't have much to add to that other than just saying that I came across a great quote from his latest book "The Great Escape: Health, Wealth, and the Origins of Inequality" that perfectly well sums up my view on economic development and what policies developed nations should pursue to help the populations in developing nations:
This is what St. Louis Fed president James Bullard today told CNBC:
When you read the standard macroeconomic textbook you will be introduced to different macroeconomic models and the characteristics of these models are often described as keynesian and classical/monetarist. In the textbook version it is said that keynesians believe that prices and wages are rigid, while monetarist/classical economist believe wages and prices are fully flexible. This really is nonsense - monetarist economists do NOT argue that prices are fully flexible neither did pre-keynesian classical economists. As a result the textbook dictum between different schools is wrong.
A warning from the past: The politics of Trump and Corbyn - it is time for classical liberals to wake up
It is becoming increasingly clear that the Chinese authorities are mismanaging the economic and financial situation and the risk that the authorities will to cause something to blow increases day by day.
Global stock markets are in a 2008ish kind of crash today and I really don't have much time to write this, but I just want to share my take on it.
Yesterday the Icelandic central bank Sedlabanki hiked its key policy rate by 50bp to 5.50%. The hike was fully expected by the markets and is the second hike this year.