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

The Fed thinks it can fight the next recession. It shouldn’t be so sure.

The Fed thinks it can fight the next recession. It shouldn’t be so sure. Lawrence Summers, September 8, 2016, Opinion, “As I argued in the first blog post in this series last week, I was disappointed in what came out of The Federal Reserve’s annual conference in Jackson Hole, Wyo., for three reasons. The first reason, as I wrote in that post, was that the Federal Reserve should have signaled a desire to exceed its 2 percent inflation target during periods of protracted recovery and low unemployment, and in this context to signal that a rate increase was off the table for September and quite likely the rest of the year. Friday’s employment report further strengthens the case for delay both by adding to the evidence on the absence of inflation pressures and by suggesting a less robust economy than most expected.Link

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The Curse of Cash

The Curse of Cash. Kenneth Rogoff, 2016, Book, “The world is drowning in cash—and it’s making us poorer and less safe. In The Curse of Cash, Kenneth Rogoff, one of the world’s leading economists, makes a persuasive and fascinating case for an idea that until recently would have seemed outlandish: getting rid of most paper money.  Even as people in advanced economies are using less paper money, there is more cash in circulation—a record $1.4 trillion in U.S. dollars alone, or $4,200 for every American, mostly in $100 bills. And the United States is hardly exceptional. So what is all that cash being used for? The answer is simple: a large part is feeding tax evasion, corruption, terrorism, the drug trade, human trafficking, and the rest of a massive global underground economy.Link

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The Sinister Side of Cash

The Sinister Side of Cash. Kenneth Rogoff, August 25, 2016, Opinion, “When I tell people that I have been doing research on why the government should drastically scale back the circulation of cash—paper currency—the most common initial reaction is bewilderment. Why should anyone care about such a mundane topic? But paper currency lies at the heart of some of today’s most intractable public-finance and monetary problems. Getting rid of most of it—that is, moving to a society where cash is used less frequently and mainly for small transactions—could be a big help.Link

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The Easy Money Contagion

The Easy Money Contagion. Carmen Reinhart, August 24, 2016, Opinion, “To consider the actions taken by the world’s major central banks in the past month is to invite an essential question: when – and where – will all this monetary easing end? At the end of July, the Bank of Japan announced that it would maintain its current negative interest rates and bond-buying program. At the same time, the BOJ pledged that it would nearly double its annual purchases of equity-traded funds, from ¥3.3 trillion ($32.9 billion) to ¥6 trillion. And yet the announcement of a monetary-policy package that in a different era would have been considered inconceivably accommodative, actually disappointed financial markets. To the chagrin of Japanese policymakers, the yen strengthened against major currencies.Link

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What We Need to do to Get Out of this Economic Malaise

What We Need to do to Get Out of this Economic Malaise. Lawrence Summers, August 18, 2016, Opinion, “John Williams has written the most thoughtful piece on monetary policy that has come out of the Federal Reserve in a long time. He recognizes more explicitly than others that, the neutral interest rate, is now very low and quite probably will remain very low for a long time to come.  As he recognizes, this the essence of the secular stagnation concern that I and others have been expressing for the past three years.Link

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Harvard’s Martin Feldstein: Labor Market Remains Tight

Harvard’s Martin Feldstein: Labor Market Remains Tight. Martin Feldstein, August 4, 2016, Opinion, “Former Reagan Economic Advisor and current George F. Baker Professor of Economics at Harvard University Martin Feldstein weighed in on concerns about the deficit and the state of the U.S. economy and job market.” Link

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Would Reducing the US Corporate Tax Rate Increase Employment in the United States?

Would Reducing the US Corporate Tax Rate Increase Employment in the United States? Martin Feldstein, 2016, Book Chapter. “Reducing the corporate tax rate and changing the rules for taxing the foreign earnings of US corporations would have many favorable effects, including an increase of employment in the United States.  First, a brief description of the current corporate tax arrangements. The federal government now imposes a statutory tax rate on corporate profits of 35 percent, the highest tax rate among all the industrial countries of the world. In addition, the individual states levy corporate tax rates that average 9 percent. Since that state tax is a deductible expense in calculating income subject to the federal corporate tax, the combined tax rate is approximately 40 percent.Link

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Where the Fed Will Be When the Next Downturn Comes

Where the Fed Will Be When the Next Downturn Comes. Martin Feldstein, July 5, 2016, Opinion, “Testifying before the Senate on June 21, Federal Reserve Chair Janet Yellen said the chances of the U.S. economy sliding into recession this year are “quite low.” I agree. But the Fed still faces the difficult problem of what to do when the next downturn occurs if interest rates are still extremely low.Link

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Former Treasury Secretary Larry Summers On What ‘Brexit’ Means For The U.S.

Former Treasury Secretary Larry Summers On What ‘Brexit’ Means For The U.S.. Lawrence Summers, June 27, 2016, Audio. “Here & Now’s Jeremy Hobson speaks with former Treasury Secretary and Harvard University president Larry Summers about what “Brexit” might be mean for markets around the world and in the U.S., and whether we are at risk of a recession or other economic downturns.Link

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