The Great Reflation

Today, the United States and the rest of the world are recovering from the 2008 financial panic and the Great Recession it triggered. Thanks to a set of dramatic policy moves made when the credit markets suddenly froze following the collapse of Lehman Brothers, our economy narrowly averted a deflationary depression resembling the 1930s. Quantitative easing, interest rates at near zero, and central bank purchases of toxic assets have done a great deal to restart the economy. However, these short-term remedies have not cured the long-term illness. Unless we transition be.....