I'm just wondering, what can keynesian economics and classical economics teach as about the nature of the U.S. economy during the 1990s, in terms of growth, inflatio and so forth?
I dont know that much about either, but its clear enough that have nice easy access credit and you have a boom. Invest that borrowed money into things that dont provide a great return, and it all goes pear shaped. Inflation is also nowhere near as huge a bugbear as monetarists think.
American economy has reached its peak. now slowly it will fall from its super power status (first economically and the by its milatry and so on). America will fall from a super power altogether probably by 2050 or may be a little later.
I don't know why that would have to be true. When you look at a graph of our economic history you will see a recession every decade our two. Each time, everybody thought it was the end and there was nowhere to go but down. Despite this, things have only gotten better in the long run. We find some new technology or market, we do what needs to be done to feed the economy, and we get back on track. Even if the government did collapse, I am pretty sure it would be immediatly replaced by something (possibly multiple things) on the same soil that will have as much (if not more potential). And chances are, it will me more self centered and less pleasant to the rest of the world due to renewed survival intinct. The economy will go on and the dollar will allways flow.
That's what I love about capitolist Economics. The invisible hand of the market directs capital towards high-yield, high-risk investments, and if those investments blow up and cause a recession in the economy, Keynesian equilibrium and Keynesian fiscal policy eventually restores it. And that is how the US has kept its economic strength over the years.
