I have never studied economics formally, and so I had to look up the ZLB and Great Moderation that economist Paul Krugman refers to in a blog post in the New York Times. ZLB stands for ‘Zero Lower Bound’ and means that a central bank (such as the Federal Reserve in the United States) has no ability, or a very limited one, to stimulate the economy with interest rate cuts. The ‘Great Moderation’ refers to a reduction in the volatility of recessions and economic growth cycle fluctuations, that started in the mid-80s. The reduction is attributed to central bank independence (from politics), monetary policy and improved economic structures. But here we are in August 2016 with near-full employment, near-zero interest rates, some eight years after the Great Recession, and wages not going up for the average worker. We still cannot pay workers a living wage (the federal minimum wage has been stuck at $7.25 since 2009).
