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Ted D. Bear

Ft On Intertemporal Misallocation

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Interesting article in today's FT (no subscription required for this article).

The Fed, with the encouragement and support of the political class, kept rates low so as continually to postpone financial busts over the past decade and a half.

This has led to over-investment, from the technology bubble to the housing bubble, with one bubble obligingly taking over from the previous bubble. Now there are no bubbles left to blow.

The term the "Austrians" use for this sort of policy mistake is "intertemporal misallocation". That means that the only way growth has been maintained as high as it has as long as it has is by borrowing it from the future, so to speak. Well, the future is now.

Not news for many HPC readers, but nice to see this in print!

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?

      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%

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