November 2016 Macro Pulse -- Keynesian in Wolf’s Clothing?

Donald Trump’s garnering the GOP nomination and then winning the U.S. presidential election have turned much conventional thinking on its head; that is unlikely to stop after the inauguration. Trump emerged as front-runner of the party typically viewed as the “conservative” political brand in the United States, which has often championed government austerity over government stimulus. Early glimpses of Trump’s economic policies suggest that, initially at least, stimulus rather than austerity will likely hold the upper hand, however. This policy approach, partially reflecting John Maynard Keynes’ prescription for dealing with inadequate aggregate demand, is intended to revive a stagnating economy. The $64,000 question is whether the stimulus being considered will generate a large enough economic effect to eliminate the deficit and reduce the federal debt that is already roughly equal to gross domestic product.

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The Macro Pulse blog is a commentary about recent economic developments affecting the forest products industry. The monthly Macro Pulse newsletter typically summarizes the previous 30 days of commentary available on this website.