There has been a long-term downward trend in the share and - TopicsExpress



          

There has been a long-term downward trend in the share and strength of labour in national income, which is depressing both demand and inflation. This has prompted ever more expansionary monetary policies. While understandable, indeed appropriate, within a short-term business cycle context, this has exacerbated longer-term trends, increasing inequality and financial distortions. Perhaps the most fundamental problem has been over-reliance on debt finance (leverage). We suggest measures, perhaps including government involvement, to raise the share of equity finance in housing markets; such reforms could be extended to other sectors of the economy.
Posted on: Wed, 05 Nov 2014 09:47:19 +0000

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