America’s Most Important Economic Storyteller Is Confused

Now, there are bullish voices telling us that things are headed back to normal. Mainstream forecasts for GDP growth this year (2010) are quite robust, north of 4 percent for the year, based on evidence from past recoveries. However, the underlying fundamentals of a banking crisis are far different from those of a typical business-cycle recession, a

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Where do we stand on the issue of deflation versus inflation? We think we’ll have both. Deflation first, and then inflation. It will probably take further downturns and a greater collapse of borrowing and lending to induce even more extreme responses from governments. In the endgame, we see a very low likelihood that the Federal Reserve and other c

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Economists often debate about what the change means. The most pessimistic interpretation, advanced by economists including Jeffrey Sachs of Columbia University, is that the pattern reflects profound structural problems in the American economy: among them, increasing competition from other countries, an imbalance between the service and manufacturin

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