3rd October 2011
Econbrowser asks the question: "Would more direct control of US monetary policy by Congress and the President be more consistent with democratic principles than the current system?" Several reasons are given by the article why this may not be the case.
Ben Bernanke recently described US unemployment as a "national crisis" but are there any solutions to the problem? Step in China. Paul Krugman of The New York Times warns that if China continues to keep the Yuan undervalued it will hurt the US trade balance and thus its economy.
Fears that China could soon be heading for a recession because of its property bubble and a potential downturn in Europe and America are "overblown" according to Stephen S. Roach of Project-Syndicate. Roach gives pretext to the inflation and property market issues currently facing China.
With news this morning that Greece is unlikely to meet its deficit target in 2011 and equity markets down on worries about European banks, Buttonwood columnist of The Economist gives his view on the current mess. He offers an alternative to handing out "free money" to asset markets – the objective of QE.
The debate between economists about whether or not fiscal stimulus actually works to stimulate the economy hinges on whether there is enough empirical evidence to hold up the argument. A study by Vox EU supports the view that fiscal stimulus does work.
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