To sum up: I consider a growth profile in which capital, labor, and output all grow 2.5% faster per year than is currently anticipated for the next four years. Such a growth profile would put upward pressure on the real wage and the real interest rate. However, the real wage and the real interest rate both seem unusually low relative to historical norms. The above analysis suggests that the price pressures from my proposed alternative growth path would only be sufficient to push those prices back into alignment with their historical ranges.
He says the past looks good, let's go there. But how are we going to get the debt to go down, in our wayback machine. Can we do deflation fast enough; get those old 90s prices.
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