Publications: Notes at the Margin

An Economy Constrained by Market Power: Entering an Era of Deflation (August 18, 2014)


The global and US economies present a very curious picture. Many countries have slumped into recession again or are on the verge of doing so. At the same time, there seem to be millions of job openings that cannot be filled. We conclude from our armchair that the world may be entering a prolonged deflationary cycle in which we will observe frequent periods of economic constraints, particularly labor shortages. We add that our conclusions rely not on computer modeling and forecasting but rather our analysis of interesting and disturbing trends that point to some bleak years ahead.


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