Found 377 article(s) in category 'Monetary Policy'

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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Secular Stagnation and Monetary Policy

Secular Stagnation and Monetary Policy. Lawrence Summers, 2016, Paper. “I have been engaged in thinking, writing, provoking, and analyzing around the issue of secular stagnation: the issue of protracted sluggish growth, why it seems to be our experience, and what should be done about it.1 This paper summarizes my current thinking on those topics and reflects on the important limits monetary policy experiences in dealing with secular stagnation.Link

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The Dark Shadow

The Dark Shadow. Amartya Sen, June 14, 2016, Opinion. “It cannot be said that the European ­Union is doing particularly well at this time. Its economic performance has been mostly terrible, with high unemployment and low economic expansion, and the political union itself is showing many signs of fragility. It is not hard to understand the temptation of many in Britain to call it a day and “go home”. And yet it would be a huge mistake for Britain to leave the EU. The losses would be great, and the gains quite puny. And the “home” to go back to no longer exists in the way it did when Britannia ruled the waves.Link

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Dollar Pricing Redux

Dollar Pricing Redux. Gita Gopinath, June 13, 2016, Paper, “A country’s exchange rate is at the center of economic and political debates on currency wars and trade competitiveness. The real consequences of exchange rate fluctuations depend critically on how firms set prices in international markets. Recent empirical evidence has challenged the dominant ‘producer currency’ pricing and ‘local currency’ pricing paradigms in the literature. In this paper we propose a new paradigm, consistent with the empirical evidence and characterized by three features: pricing in dollars, strategic complementarity in pricing and imported inputs in production. We call this the ‘dollar pricing’ paradigm and contrast its theoretical predictions with prior approaches in a general equilibrium New Keynesian model. We then employ novel data for Colombia to evaluate the implications of exchange rate fluctuations associated with commodity price shocks and show that the findings strongly support the dollar pricing paradigm.Link

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Meet the Oligarchs: Business Legitimacy, State Capacity and Taxation

Meet the Oligarchs: Business Legitimacy, State Capacity and Taxation. Rafael Di Tella, June 11, 2016, Paper, “We analyze the role of people’s beliefs about the rich in the determination of public policy. A question we study is the desirability of government-private sector meetings, a variable we argue is connected to State capacity. Survey respondents primed with negative views about business leaders want fewer of these meetings, as well as higher taxes to the top 1% and more regulation. We also study how these effects change when subjects are primed with negative views about government. A model helps interpret these findings.Link

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The Overselling of Financial Transaction Taxes

The Overselling of Financial Transaction Taxes. Kenneth Rogoff, June 6, 2016, Opinion. “However November’s presidential election in the United States turns out, one proposal that will likely live on is the introduction of a financial transaction tax (FTT). While by no means a crazy idea, an FTT is hardly the panacea that its hard-left advocates hold it out to be. It is certainly a poor substitute for deeper tax reform aimed at making the system simpler, more transparent, and more progressive.” Link

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Reducing Long Term Deficits

Reducing Long Term Deficits. Martin Feldstein, May 26, 2016, Paper. “The most serious long-term challenge for the economic policy of the US Federal government is the explosive growth of the national debt that will occur unless there are specific policy actions. The ratio of the federal government debt to the GDP has doubled in the past decade from a level of less than 40 percent that prevailed for many years before the recent recession to 75 percent of GDP now. According to the most recent report by the Congressional Budget Office (2016), the debt ratio is already beginning to rise. The CBO projects that with current policies the debt to GDP ratio will reach 86 percent within ten years and the federal debt will be on its way to 155 percent of GDP by the year 2045. I suspect that even this disturbing forecast is too optimistic because a debt trajectory like that is likely to cause portfolio investors in the United States and elsewhereto conclude that the U.S. government has lost control of its fiscal policy …” Link

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