Monday, September 21, 2015

Low Interest Rates Mask the Effects of Job-Killing Policies

Low Interest Rates Mask the Effects of Job-Killing Policies:

Seven years of relaxed monetary policies have caused U.S. household wealth to soar, but for most Americans this tremendous accumulation of wealth has not translated into robust wage growth.
In other words, while the Federal Reserve’s quantitative easing has not led to the consumer price inflation that many feared, it has led to asset price inflation. (The WSJ concludes by noting, ominously, that wealth-to-GDP ratios have only come close to their current level of 4.8 during notorious bubbles). Soaring household wealth levels aren’t a bad thing per se, but job growth, not asset price inflation, is the best way to promote economic growth.
by Jason Willick via The American Interest