Found 385 article(s) in category 'Monetary Policy'

The Return of Dollar Shortages

The Return of Dollar Shortages. Carmen Reinhart, October 24, 2016, Opinion, “Immediately after World War II ended, a new phrase entered the economic lexicon: “dollar shortage.” European economies were coping with extensive war-related damage and a broad array of impediments to their efforts to rebuild their industrial base. At the time, the United States was the only provider of capital equipment for reconstruction. So, without access to US dollars, Europe’s economies could not obtain the inputs needed to increase their exports.Link

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What Could Go Wrong in America?

What Could Go Wrong in America? Martin Feldstein, October 16, 2016, Opinion, “Although the United States economy is in good shape – with essentially full employment and an inflation rate close to 2% – a world of uncertainty makes it worthwhile to consider what could go wrong in the year ahead. After all, if the US economy runs into serious trouble, there will be adverse consequences for Europe, Japan, and many other countries.Link

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Ability to Fight Recession a Matter of Serious Concern

Ability to Fight Recession a Matter of Serious Concern. Lawrence Summers, October 10, 2016, Video, “The concern about low interest rates and the ability to fight off a recession should be keeping central banks up at night, former Treasury Secretary Larry Summers told CNBC on Monday. That’s because interest rates typically come down 500 basis points to contain a recession, and according to market pricing, there’s not going to be 500 basis points of room anytime soon, he said in an interview with “Closing Bell.”Link

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Is the Fed Playing Politics?

Is the Fed Playing Politics? Kenneth Rogoff, October 3, 2016, Opinion, “In his recent debate with his opponent Hillary Clinton, Republican presidential candidate Donald Trump pressed his claim that US Federal Reserve Chair Janet Yellen is politically motivated. The Fed, Trump claims, is applying overdoses of monetary stimulus to hypnotize voters into believing that economic recovery is underway.Link

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The Perils of Debt Complacency

The Perils of Debt Complacency. Carmen Reinhart, September 28, 2016, Opinion, ““What a government spends the public pays for. There is no such thing as an uncovered deficit.” So said John Maynard Keynes in A Tract on Monetary Reform.  But Robert Skidelsky, the author of a magisterial three-volume biography of Keynes, disagrees. In a recent commentary entitled “The Scarecrow of National Debt,” Skidelsky offered a rather patronizing narrative, in a tone usually reserved for young children and pets, about his aged, old-fashioned, and financially illiterate friend’s baseless anxiety about the burden placed on future generations by the rising level of government debt.Link

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Why shredding $100 bills could be great for the economy

Why shredding $100 bills could be great for the economy. Kenneth Rogoff, September 17, 2016, Video, “While more than half of all transactions in the US are electronic—think debit cards, Apple Pay and Venmo—there’s still a record $1.4 trillion in physical currency, from pennies to $100 bills, circulating in the global economy. That’s almost double the amount from a decade ago, and about 80% of that cash is in $100 bills. These large bills could be making us poorer and less safe, says Kenneth Rogoff, Harvard economist and author of the new book “The Curse of Cash.” For Rogoff, the benefits of phasing out both $50 and $100 bills are two-fold: It would hamper criminal activity and aid monetary policy.Link

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The Fed’s Stress Tests Need to Be Transparent

The Fed’s Stress Tests Need to Be Transparent. Hal Scott, September 16, 2016, Opinion, “The stress tests that big American banks face each year are about to get more stressful. The Fed is planning to substantially increase—by an average of 57%, we calculate—the regulatory capital that the eight largest banks in the U.S. need to pass the annual tests.  Had these expected higher capital levels been in effect this year, it is likely that the country’s four largest banks ( J.P. Morgan Chase, Bank of America, Wells Fargo and Citigroup) all would have failed the test. As a consequence, they would have been barred from remitting more profits to their shareholders.Link

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Why Taxing Fairly Means Not Taxing Inheritances

Why Taxing Fairly Means Not Taxing Inheritances. N. Gregory Mankiw, September 9, 2016, Opinion, “Does it make sense to tax inheritances and, if so, how much? The answer to this question is a perennial political football. President George W. Bush, to whom I was an adviser, pushed for the elimination of the estate tax. He succeeded, but only briefly. In 2001, he signed legislation that phased out the tax and eliminated it in 2010. But the tax was back in 2011.Link

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