[OPE-L] The state of the US economy according to The Levy Economics Institute

From: Dave Zachariah (davez@KTH.SE)
Date: Tue Jan 22 2008 - 16:23:16 EST

on 2008-01-22 15:47 Jerry Levy wrote:
> Do you expect the that the US economy and world capitalist economy 
> will experience deflation or stagflation in the immediate period ahead?

The Levy Economics Institute has released another analysis by Godley et al.:

     The U.S. Economy: Is There a Way Out of the Woods?

    This Strategic Analysis provides a retrospective view of U.S. growth
    in the last 10 years, showing that the authors’ previous work,
    grounded in the linkages between growth and the financial balances
    of the private, public, and foreign sectors of the economy, has
    proven a useful contribution to the public discussion. The analysis
    reviews recent events in the U.S. housing and financial markets to
    obtain a likely scenario for the evolution of household spending. It
    argues that a significant drop in borrowing is likely to take place
    in the coming quarters, with severe consequences for growth and
    unemployment, unless (1) the U.S. dollar is allowed to continue its
    fall and thus complete the recovery in the U.S. external imbalance,
    and (2) fiscal policy shifts its course—as it did in the 2001 recession.

    See: http://www.levy.org/vdoc.aspx?docid=964

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