Post WW2 Competitive Adjustment and the New Normal

Source Post WW2 Global Economic Growth
Competitive Adjustments and the Rise of Populism

See US Economic Normality 1945-2015


 Post WW 2 Chronology

The Good

World Wide Recession Made Low Unemployment "the" Public Policy Goal.
  Post WW2 Pent-up Demand increased AD, increasing US wages and Profits.
The Resulting High Inflation pushed interest rates up followed by a 30-year decline.

2. The Bad

Profit Margins Stayed High as Western business used continuously falling interest rates for highly leveraged refinancing creating higher profit.
Western Business Adjusted to a mounting profit squeeze caused by increased flat world AS. "Wages fought profit and Profit Won."
Only U.S. Increasing Demand was available to soak up global savings surplus to negate AS > AD. Will continue?

3. The Ugly

Resulting Political Turmoil will also continue but its effects may be less volatile, maybe not.
Fiscal Policy AD Could Increases in the form of Infrastructure spending and or helicopter money drops like tax reductions.
Government Guaranteed of Debts may allow 2% real 1950's style economic growth.

See  U.S. Post WW 2 Adjustments  
 

1. The Good
Cold War to 1980 AD > AS
Full Employment Goal Caused Inflation
and a Debtors Paradise

2. The Bad
Neo Liberal Reset 1980- 2008 AS > AD

Business Responded to Inflation Led to
Deflation and a Creditors Paradise

3. The Ugly

Reactions to Neo Liberalism
Sustained Deflation has Winners and Losers
Globalization Failed
Pickett's R > G Back to Equilibrium with Increased Income Inequality