What Trump Can Do to Prevent the Next Crash

9/14/2017 - Professor of Economics Alan M. Taylor in the New York Times.

The Federal Reserve arguably has more influence on the daily lives of Americans than any other government agency. In the coming year President Trump has a chance to appoint or replace five of the central bank’s seven governors, including the vice chairman, Stanley Fischer, and possibly the chairwoman, Janet Yellen.

In the postwar era, finance has grown enormously as a share of the global economy, often feeding debt-fueled bubbles. In 2015, the economist Alan M. Taylor and his colleagues looked at data going back 140 years for 17 leading economies. Before World War II, there were 78 recessions — including only 19 that followed a bubble in stocks or housing or both. After the war, there were 88 recessions, a vast majority of which, 62, followed a stock or housing bubble or both.

Read the full story in the New York Times.

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