The Oil Drum | Monday Open Thread...

138 comments on Monday Open Thread...

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tom deplume on February 20, 2006 - 4:05pm

When someone uses the economic term "soft landing" it means to me that he prefers high unemployment over inflation. The term only comes out of the mouths of people who isolated from the risk of unemployment.

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Don Sailorman on February 20, 2006 - 4:34pm

Sorry, but you are entirely mistaken about the term "soft landing" and its meaning. "Soft landing" refers to a reduction in the rate of real economic growth, as opposed to a recession, which by definition requires a decline (as opposed to a reduction in rate of positive growth) in real Gross Domestic Product.

You are correct that unemployment increases any time growth in real GDP declines below about 3.5% for any substantial length of time. The main justification for economic growth is that it is necessary to keep the rate of unemployment down.

The problems of coming to grips with a steady state economy have not been worked out even in theory, much less in practice.

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LevinK on February 20, 2006 - 4:34pm

Actually quite the opposite, my branch is predicated on growth and discretionary spending so I think I would be pretty much on the list. But I've been through hyperinflation once... it ain't fun either. And you still can lose your job, or even worse - the paycheck you get will not be worthed the paper.

On the other hand, bearing in mind the overexposed external position of the US economy, I can't see some mild scenario of 10% inflation and moderate unemployment... it will probably be either or. My best case scenario would be a moderate recession and a gradual reduction of the debt in the next decade or two.

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138 comments on Monday Open Thread...

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