The Overshoot

Matthew C. Klein
Making sense of the global economy and financial markets
Created 14 Jun 2021
  • The Federal Reserve Wonders What "Maximum Employment" Means
    22 Sep 2021 • 5 min read • 6 0
    The Federal Reserve has three hurdles that must be cleared before it starts raising short-term interest rates: The Committee decided to keep the target range for the federal funds rate at 0 to 1/4 per...
  • The Global Implications of the German Election
    22 Sep 2021 • < 1 min read • 2 0
    Sunday’s German federal election should lead to a change in government that will likely improve global economic conditions. The exact outcome will determine the magnitude of the gains, which range fro...
  • How America Has Financed Its Pandemic-Era Trade Deficits: Printing Money
    22 Sep 2021 • < 1 min read • 1 0
    American consumers, businesses, and governments collectively spent about $1 trillion more than they earned in income since the end of 2019. The necessary corollary is that entities outside the U.S. sp...
  • Margins, Wages, Input Costs, and Inflation
    17 Sep 2021 • < 1 min read • 2 0
    Prices paid by U.S. businesses for materials, supplies, components, and services are soaring. Excluding energy, the prices of manufactured goods sold to other businesses as inputs are up 21% since las...
  • America's Inflation Story Is Entering a New Phase
    14 Sep 2021 • 4 min read • 4 1
    The temporary inflation spike associated with America’s reopening seems to have ended—or even partly reversed. The question now is what happens to the much larger categories that have helped hold infl...
  • The Smart Reason to be Worried About Inflation: a Conversation with Kevin Ferry
    09 Sep 2021 • < 1 min read • 3 2
    I have been broadly sanguine about the rapid pace of consumer price increases since the spring because the data so far imply that those price spikes are largely one-offs associated with re-opening. Pa...
  • What is Going On in China?
    03 Sep 2021 • < 1 min read • 4 2
    China’s Central Committee for Financial and Economic Affairs, led by President Xi Jinping, recently promised to “adjust excessive incomes” and to “encourage high-earning people and companies to play a...
  • Inequality, Interest Rates, Aging, and the Role of Central Banks
    31 Aug 2021 • 11 min read • 11 2
    Here are three facts about the recent history of the world: Income has become more concentrated within societies. Both the shares of household income going to the top 1% and corporate profit shares ha...
  • U.S. Housing Normalization Continues
    25 Aug 2021 • < 1 min read • 1 0
    The continued strength in construction and the end of panic-buying is helping to rebalance the market for new single-family homes. That should help prospective buyers who were concerned about being “s...
  • Pro-Growth Isn't Anti-Environment
    20 Aug 2021 • 7 min read • 11 0
    Human activity is threatening the sustainability of human life on earth. The recent spate of devastating wildfires and floods will be just the beginning if current trends aren’t sharply reversed. The ...
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