Turkey’s retaliation, China’s falling currency, wage growth and market power, and coming policy mistakes

1 Big Thing: macro policy is getting it all wrong
Today's lead topic is pulling from multiple threads from the last twenty-four hours. And the gist of those threads is that policy makers have got it all wrong when it comes to macro. Yesterday, in the daily I touched on this theme with the economists' prediction that Fed policy would be the genesis of the next downturn. But here are a few more threads, both forward and backward-looking.

The first one is on the last recession. And here's the part that best highlights the premise:
More clues that Alesina, Ardagna, Reinhart, and Rogoff got everything wrong can be found in the real world, where the Obama administration's modest stimulus package, while too small to fix the Great Recession entirely, did make things much better. Conversely, the E...


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