RWER issue 57: Steve Keen
Economic growth, asset markets and the credit accelerator
According to the U.S. National Bureau of Economic Research, the “Great Recession” is now two years behind us, but the recovery that normally follows a recession has not occurred. While growth did rise for a while, it has been anaemic compared to the norm after a recession, and it is already trending down. Growth needs to exceed 3 per cent per annum to reduce unemployment—the rule of thumb known as Okun’s Law and it needs to be substantially higher than this to make serious inroads into it. Instead, growth barely peeped its head above Okun’s level. It is now below it again, and trending down. Unemployment is therefore rising once more, and with it, Obama’s chances of re-election are rapidly fading.
You may download the whole paper at: http://www.paecon.net/PAEReview/issue57/Keen57.pdf