I want to kick off a new recurring section of our site, the AIM Newsletter. I'm constantly reading and researching to help you understand the market and economic shifts. I thought creating this newsletter would serve as a bookmark for the information I gathered so I can review it later and give you additional information to help better positions portfolios. My goal is to highlight tweets, academic articles, videos, and charts that I found interesting in my research. I hope you enjoy it!
Atif Mian and Amir Sufi have published an article centered around household credit. Specifically, they are focused on how household credit drives the business cycle. They found that a decline in interest rates leads to a three-year credit expansion followed by strong economic growth that diminishes over seven years.
Books I'm Reading
The Deficit Myth by Stephanie Kelton. With Fiscal and Monetary Policy increasing in size, I think it's essential to read and research potential policy makers' "theory" or views. In the current administration, several economic advisors agree with Kelton's Deficit Myth or Modern Monetary Theory. She raises some interesting points in her book. I don't want to spoil the read, but her book centers around reframing how fiscal dollars enter the economy. Traditional economics states that the government spends and borrows after they've raised sufficient tax revenue. Kelton argues that the government has to first spend, or there would not be anything to tax. It's a radical shift in the way policy is traditionally taught. Reading this book will provide you insights into current economic policy that could take hold in the future.