JRL NEWSWATCH: “How Cold War II Could Turn Into World War III” – Bloomberg

“History shows that nothing causes fiscal and monetary instability quite like multiple big, long conflicts.”

“… Large-scale war is simultaneously destructive of productive capacity, disruptive of trade, and destabilizing of fiscal and monetary policies. … Economists tend to treat wars as ‘exogenous shocks,’ generally omitting them from their models. From the historian’s standpoint, however, war is not exogenous, but the endogenous prime mover of the historical process … Two general points are especially worthy of notice. First, wars have played a very noticeable role in the history of inflation expectations. … Second, wars have often been responsible for discontinuities in the history of interest rates. … An unusual feature of the recent past is that in 2020 a pandemic had the fiscal and monetary consequences of a world war. This was unprecedented. … Regrettably, major policy errors were committed in the second plague year of 2021. …”

Click here for: “How Cold War II Could Turn Into World War III; History shows that nothing causes fiscal and monetary instability quite like multiple big, long conflicts.” – Bloomberg/ Niall Ferguson