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Nick Rowe´s wish for 2016

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That we have a basic, or minimalist, understanding of recessions:

Recessions are not about output and employment and saving and investment and borrowing and lending and interest rates and time and uncertainty. The only essential things are a decline in monetary exchange caused by an excess demand for the medium of exchange. Everything else is just embroidery.

Is that important? I believe so, since if that were widely understood it is doubtful that most developed economies would still be “rolling in the deep”!


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