The greatest amount of growth will be seen in emerging markets, in particular where government finances are healthier and economic expansion
means more consumer spending.
«I would say the economic recovery tends to show up first in restaurants and retail, which benefit sooner
from more consumer spending,» says Kroeker.
Sarhan agreed with Kinahan that the Fed would ideally like to
see more consumer spending before raising rates, but he also called attention to the housing market; citing mortgage rate hikes on Wednesday, Sarhan told Benzinga that real estate was the «biggest missing piece.»
The researchers suggest at the end of the paper that if the government sees a need to
spur more consumer spending, particularly on durable goods like automobiles, that it might consider directly targeting consumer debt burdens.
That should lead to
more consumer spending.
In addition, the massive tax cut and increases in government spending will also lead to
more consumer spending and the need to hire more workers, further fueling price pressure.