Donald Trump will try to "overheat" the US economy: What effects?
US economic growth will slow down markedly as the United States is returning to full employment, probably from the second half of 2018. As a reaction to this inevitable slowdown in the US economy, Trump will definitely react to stimulate growth with: An even more expansionary fiscal policy; Pressure on the Federal Reserve to stop it from hiking its interest rates. So this will be an attempt to organise an "overheating" of the US economy (stimulating demand at full employment). Should we expect positive effects from this development? We can think of: A rise in the participation rate, as companies have to attract new employees; Higher productivity gains, as companies have to produce more at full employment. But it is not certain that these effects are significant, while the overheating of the US economy will definitely lead to an increase in the US external deficit, and therefore in financial imbalances .