Activist labour unions may check deflationary tendencies

WHAT connection could there be between the advent of Jeremy Corbyn as prospective leader of Britain's Labour Party and the ever-spreading deflationary influences that appear to be afflicting the global economy nowadays, or with financial phenomena such as rising bond yields?

The link is not a direct one and yet Mr Corbyn's advocacy of restoring more power to labour unions in Britain may have a wider economic relevance than many people realise. Wittingly or otherwise, he may have identified a key cause of low growth and deflation.

Delationary tendencies persist despite the fact that unprecedented amounts of financial liquidity (mone…