Lagarde: Beyond hysteresis: resilience in Europe’s labour market | Crypto Craft

  • Lagarde: Beyond hysteresis: resilience in Europe’s labour market

    From ecb.europa.eu

    Alexis de Tocqueville – one of the keenest observers of early American democracy – once wrote: “History is a gallery of pictures in which there are few originals and many copies.” In monetary policy, too, we often look to past cycles for guidance, expecting familiar patterns to repeat themselves. But this cycle has proven to be original in striking ways. Major central banks have undertaken the most aggressive tightening in a generation. At the outset, there were understandable concerns about how such a rapid and substantial adjustment would affect labour markets. Historically, disinflation has come at a cost. ... (full story)

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Schultz
Aug 24, 2025 9:38am
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They don't have to quote anyone. It is just the nature of macro economics that things are always different, but with some patterns. A near infinite number of combinations of variables.

That things ever work out is a tribute to the resilience (to use their word) of capitalism, because government and central banks do their very best to break it - well, they do from time to time. There does come a breaking point.

Major central banks have undertaken the most aggressive tightening in a generation. Maybe, but still pretty light I reckon.

To wit - I think the world is so much more fragile now compared with even just a few decades ago. Try doing what Volcker did in the late 70s early 80s - and long term bonds went to 15% - and the whole solar system would burn. Then - a recession. Not to be sneezed at, but in the scheme of things, Pfft.
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