International Economics: IB Economics

The headline to this article looks to be remarkable: can an economy be doing "too well". However, the reason for it might be that for all the talk of a successful green transition and job creation in the US, the economy is only operating beyond the full employment level of national income because of borrowing, and the inflationary effects of this mean that the standard of living of the average US worker hasn't really been improved at all. 

Larry Elliott looks at the current policy 'du jour' - modern monetary theory (MMT). In essence, it means that government's should print money to escape a recession; in essence, it's a monetary reworking of Keynesianism - provided there are spare resources, spending on public works could get the economy back to full employment. The worry though, is that any expansion of the monetary supply is going to result in inflation. 

It is - as they say - a lovely example of what goes around comes around. Keynesianism in monetarist clothing?  

This is a really interesting argument about the nature of full employment in the Australian economy, noting that for university graduates there aren't very many jobs available, and those that are can be low-paid and relatively insecure. 

As a result, despite a seemingly healthy unemployment rate of 4%, it seems to be the case that an important measure of the health of the economy might be the level of under-employment which would better indicate the loss of potential output.