I think the missing link in your explanation of the discontinuity in world growth around 1870 is America. The advent of steam ships made the continent accessible to overcrowded and even starving Europeans - leaving those left behind with more land. (20% of the population of Sweden moved here.) The massive investment in rail lines after the Civil War made the country not only accessible, but transformed the country into a single market for entrepreneurs - creating millionaires and opportunities for entrepreneurs.
Fed Aggressiveness: Maybe in all cases the starting point should be when actual or expected inflation rose above the target of the time. _My_ take is that the Fed is reacting to the bleated realization that it should have started tightening sooner (at least when TIPS went above 2.3% CPI. This view is still consistent with a pause now that TIPS has returned to the 2.3% zone and that even if it does pause, we may still have a recession. :(
Dr. DeLong,
I think the missing link in your explanation of the discontinuity in world growth around 1870 is America. The advent of steam ships made the continent accessible to overcrowded and even starving Europeans - leaving those left behind with more land. (20% of the population of Sweden moved here.) The massive investment in rail lines after the Civil War made the country not only accessible, but transformed the country into a single market for entrepreneurs - creating millionaires and opportunities for entrepreneurs.
Bill Johnson
Fed Aggressiveness: Maybe in all cases the starting point should be when actual or expected inflation rose above the target of the time. _My_ take is that the Fed is reacting to the bleated realization that it should have started tightening sooner (at least when TIPS went above 2.3% CPI. This view is still consistent with a pause now that TIPS has returned to the 2.3% zone and that even if it does pause, we may still have a recession. :(