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Economics is trendy

| Posted by: Paul Donovan | Tags: Paul Donovan

  • The US presidential campaign is starting to look at the important things (economics is of course the only important thing). Trump has said he expects US trend growth of 3.5% if he were to win the presidency.
  • Trend growth is a function of productivity growth and (working) population growth. Productivity is just everything economists do not understand, and is difficult to target. Working population growth can be raised by increased labor participation. Or, of course, by increased immigration.
  • In the EU, leaders meet for a fun weekend summit. All except British Prime Minister May, who has not been invited, and is sitting on her own in the northwest corner of the playground while all the other leaders get to play in the sandbox in Bratislava. Market moving conclusions are, however, unlikely.
  • US consumer price inflation is due. Watch components like housing and healthcare (these measures, which are almost entirely domestic in nature, account for almost half the consumer price index). Oil price deflation should cease to be an issue from next month, so parochial issues become more important.