Less Taxes and Restrictions, More Stimulus and Inflation

By Isaac Cohen*

After falling before the election for nine consecutive days, unseen since 1980, the markets started climbing the following Monday before the voting. Following the Republican victory, investors have sold bonds and gold and returned to stocks, on the expectation of stronger economic growth and inflation.

Some of the elements of President-elect Donald Trump’s economic agenda are supporting this positive turn in the markets. The campaign promise of tax cuts and investment in infrastructure, amounting to a long expected fiscal stimulus, could push economic growth and inflation into higher levels. True both, the tax cuts and the public expenditure increase, demand congressional approval, but they are more feasible now because the Republican Party has the majority in the Senate and in the House of Representatives.

Other campaign promises, which can have more pernicious effects in the longer run, are not of immediate concern. Such is the case of the promised massive deportation of undocumented immigrants, which could destabilize the labor market, or the approval of custom barriers against imports from trading partners, which could unleash costly trade wars. Almost half of 57 US economists surveyed by The Wall Street Journal, after the election, said “a trade war was the biggest risk to the economy.”

Finally, even economists from the opposition recognize there is no imminent threat of a recession in the short run.

*International analyst and consultant. Commentator on economic and financial issues for CNN en Español TV and radio, UNIVISION, TELEMUNDO and other media. Former Director, UNECLAC.

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About Ramón Jiménez

Ramón Jiménez, actual Managing Editor de MetroLatinoUSA. Periodista que cubre eventos de las comunidades latinas en Washington D.C., Maryland y Virginia. Graduado de la Escuela de Periodismo de la Universidad del Distrito de Columbia. Galardonado en numerosas ocasiones por parte de la Asociación Nacional de Publicaciones Hispanas (NAHP) y otras organizaciones comunitarias y deportivas de la región metropolitana de esta capital. También premiado en dos ocasiones como Mejor Periodista del Año por la cobertura de la comunidad salvadoreña; premios otorgados por la Oficina de Asuntos Latinos del Alcalde de Washington (OLA) y otras organizaciones. Ha sido miembro del jurado calificador en diferentes concursos literarios, de belleza y talento en la región metropolitana. Ha visitado zonas de desastre en Nicaragua, Honduras y El Salvador e invitado a esos países por organizaciones que asisten a personas de escasos recursos económicos. Antes trabajó en otros medios de prensa de Virginia y Washington, D.C., incluyendo reportajes para una agencia noticiosa mundial.

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