It’s tempting to think of an economic expansion as being like a life span. The older you get, the closer you are to death; a 95-year-old probably has fewer years left to live than a 60-year-old. But this year Glenn D. Rudebusch, an economist at the Federal Reserve Bank of San Francisco, looked at the evidence from post-World War II United States economic expansions, and didn’t find that pattern held up at all.
“A long recovery appears no more likely to end than a short one,” Mr. Rudebusch wrote. “Like Peter Pan, recoveries appear to never grow old.”
Expansions don’t die of old age. They die because something specific killed them. It can be a wrong-footed central bank, the popping of a financial bubble or a shock from overseas. But age itself isn’t the problem.
A look around the world also shows plenty of examples of expansions that have lasted a lot longer than either the seven years the current United States expansion has been underway or the longest expansion in American history, from 1991 to 2001.
In short, they have to increase wages but they were able to pass some of the increases to customers. So inflation, which is good for the economy.
I am starting to think the minimum wage hike will be good for the economy. On a macro level, shifting money from savings to spending will create more demand. People getting min wage hike are mostly living hand to mouth and will spend most of their new found earnings. Another reason to be optimistic under President HRC.
Increasing min wage is good for landlords, especially owners of low end properties. .But if it goes too far, employers will stop hiring…The wage hikes should be tied to unemployment rates…If rates go up then the wage increases should be suspended…
The irony of upcoming rent control is that smart landlords are raising rents as they high as the can before rent control takes effect…We will see after the election…Not an issue for me…at least not yet…
