The US's economic expansion has been going on for 128 months, which is the longest on record. This has not come easily though. Last year, personal consumption kept us in economic expansion, while business and residential-construction investment decreased. Spending has been on the rise because low earners have been seeing an increase in wages. High earners are not seeing as significant of a wage increase as low earners. That being said, inflation has slowed down recently, which suggests demand is low. Economists are trying to figure out the reason for the weak demand, but it is hard to pinpoint the exact reasoning. One thought is that income inequality has played a role.
With the way the economy is expanded, do you believe the income equality will begin to decrease? How much longer do you think we will stay in an economic expansion?
https://www.economist.com/finance-and-economics/2020/02/13/wage-gains-for-low-earners-have-helped-sustain-americas-economic-expansion
2 comments:
I believe that income inequality will always exist in our current society. Economic expansion doesn't always directly benefit everyone in the economic spectrum and who it benefits depends on where the country is allocating policy and resources. When it comes to how long we stay in an economic expansion our time may come sooner then we think. It has been stated that our economy is mirroring what happened in the roaring 20's. If this is true or not and if we will see a recession/depression, who knows, but all I can say is we are due for a slow down soon enough.
I do think that the economic expansion will continue because there are still so many other places in the world that still are not yet modernized. Also, the process in which to get modernized has been studied for so long now that we are able to assist them as well which leads to growth for the US as well. I do see the growth slowing down at some point but I don't foresee a contraction anytime soon.
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