John Robertson

There is little danger of over stimulating the US economy. The chart at (VIEW LINK) shows the US employment/population ratio. Every significant fall in the ratio over 65 years has coincided with a US recession. With the exception of the last two, the subsequent cyclical recoveries have restored or exceeded the prior levels of the ratio. An additional five percentage points - the difference between now and 2007 - would be an extra 12.3 million jobs. It would take six years at the current rate to generate that number (by which time the population base will be higher), offering ample scope for the economy to expand more rapidly. Fast growth might even come with higher unemployment rates in the event discouraged workers start returning to the labour force, keeping the Fed in the market longer than expected.


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