David McWilliams: Beware Paschal Donohoe’s conventional thinking

Saving the economy today, to grow tomorrow, requires assertive macro-economic policy

 Minister for Finance Paschal Donohoe: assertive macro-economic policy in 2020 is the most responsible thing we can do.  Photograph: Leon Farrell/Photocall Ireland

Minister for Finance Paschal Donohoe: assertive macro-economic policy in 2020 is the most responsible thing we can do. Photograph: Leon Farrell/Photocall Ireland

This is not the time for conventional thinking. We are in a pandession. As I wrote recently, a pandession is neither a recession, nor a depression – which are both consequences of economic exuberance. Traditional economic downturns are the wages of inflation.

Such inflation might be exhibited in wages and general prices (as we experienced here in the 1980s after the 1970s inflationary burst) or in house prices (as we experienced here in 2010 after the 2000-2008 credit splurge).

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