Sunday, December 24, 2017

Real Wages...





In the backdrop of the Monetary Policy pursued by some of the most influential central bank around the world and its probable effect on spending and growth in the time on the global economy which is more dependent on the real wages/incomes/profits, Keynes plus Pigou, both, have stressed on increasing incomes or real incomes to increase demand supply growth during slowdowns.    


Lower money supply would increase interest rates everywherelse... Stoking inflation and depreciation, except the domestic economy... Higher rates would make the US uncompetitive and the exchange rate would soar... A bad trade-off just to increase domestic demand at the cost of global demand which may again reduce exports and increase imports... Globally real wages/incomes/profits would go down...  



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