The Myth of the Great Moderation: Keynes vs Greenspan | Economics 🏘️📈

The Great Moderation is a period starting from the mid-1980s until 2007 characterized by the reduction in the volatility of business cycle fluctuations in developed nations starting compared with the decades before. It is believed to be caused by institutional and structural changes, particularly in central bank policies, in the second half of the twentieth century.

During the Great Moderation, real wages and consumer prices stopped increasing and remained stable, while interest rates reversed their upward trend and started to fall. The period also saw a large increase in household debt and economic polarization, as the wealth of the rich grew substantially, while the poor and middle class went deep into debt.

And then in 2008 the economy crashed and the global finanacial sector imploded. This video shows us why.

Chapters:
00:00 Financial crisis
00:16 Historical GDP growth
00:32 Golden Age of Capitalism vs The Great Moderation
00:56 Real hourly compensation vs net productivity
01:11 Wages vs Corporate Profits
01:23 Wages vs Household Debt
01:45 US Trade Deficit / Surplus
01:57 Sectoral (financial) balances
02:23 Finance vs Manufacturing: % of domestic profits
02:35 Household Debt vs Credit Availability
02:57 Income Inequality in the US, 1910 - 2010
03:15 Income Distribution in the US; bottom 90% vs top .01%
04:56 Keynesian Economic policies and solutions

Data:
FRED | Federal Reserve Economic Data | St Louis Fed
https://fred.stlouisfed.org/

#MMT #economics #keynes #inquality #greenspan #economy

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