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Donald Trump’s economic policy has not been as bad as expected

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AS IT became clear that Donald Trump would win the presidential election, in the early hours of 9th November 2016, Asian financial markets tanked. But within hours of his victory investors changed course. A Trump presidency, they reasoned, would mean tax cuts, deregulation and infrastructure spending—in other words, more growth. A year after Mr Trump took office, it looks like the rethink was justified. Little of what was feared about Mr Trump’s economic policy has come to pass. To some, rising economic growth, which exceeded 3% in the second and third quarters of 2017, combined with accelerating blue-collar wages, suggest that Mr Trump has delivered on his promise to invigorate the economy.

In truth, Mr Trump has benefited from a global economic surge that has lifted confidence—and stockmarkets—across the rich world. His timing with regard to the labour market was particularly fortunate. He came to office with unemployment at 4.8% and falling (it is now 4.1%). Pockets of strong wage growth,…Continue reading

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