Our Divisions
The answer isn’t a straightforward one. Of course, there are circumstantial motives, like living in an location where there’s as well much competitors for jobs and Walmart is the only location hiring, possessing no mentors, and not obtaining access to a very good education. Of course, institutional racism and sexism exist, and as they say, it does take funds to make cash.
In the true globe, a central bank can surely induce folks to get risky assets by printing funds. That certainly works. BUT, if individuals have a behavioral impediment to risk-taking that prevents them from maximizing their utility, then no matter how much funds the central bank prints, the amount of risky asset holdings will be sub-optimal, relative to people’s true danger preferences.
On fiscal policy, when you understand that low interest rates are a symptom of earnings inequality the existing scenario makes a lot of sense. If you …
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It is often a paradox why government policy tends to be so uniformly pernicious. We are about to see another example of that.