Found 205 article(s) for author 'Lawrence Summers'

Larry Summers: The Fed’s mistakes are a cause for pessimism

Larry Summers: The Fed’s mistakes are a cause for pessimism. Lawrence Summers, December 22, 2015, Opinion. “It has been two years since I resurrected Alvin Hansen’s secular stagnation idea and suggested its relevance to current conditions in the industrial world. Unfortunately experience since that time has tended to confirm the secular stagnation hypothesis. Secular stagnation is a possibility. It is not an inevitability and it can be avoided with strong policy. Unfortunately, the Fed and other policy setters remain committed to traditional paradigms and so are acting in ways that make secular stagnation more likely The core idea behind secular stagnation was that the neutral real rate had for a variety of reasons fallen and might well be below zero a substantial part of the time going forward. The inference was that economies might be doomed to oscillate between sluggish growth and growth like that of the 2003-2007 period that rested on an unstable financial foundation …Link

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What Larry Summers Thinks About Raising Interest Rates

What Larry Summers Thinks About Raising Interest Rates. Lawrence Summers, December 15, 2015, Audio. “Many signs point to the Federal Reserve raising interest rates this week during its two-day Open Market Committee meeting. The last time rates were raised was nearly a decade ago; since then the Fed has pursued a policy of slashing rates and keeping them low in an effort to wrench the economy out of the Great Recession and promote greater growth and consumption. Now as economic indicators like low unemployment and increased consumer spending tick toward the positive, many economists are pointing to a limited rate hike as a way to move the economy towards normalcy after the volatility of the past decade…Link

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Rate Delay Less Risky Than Premature Hike

Rate Delay Less Risky Than Premature Hike. Lawrence Summers, December 15, 2015, Video. “In an interview with Tom Keene of Bloomberg Surveillance from the Arab Strategy Forum in Dubai, Summers voiced skepticism surrounding an expected Federal Reserve rate hike and the impact of lower commodities prices and devaluing currencies. Summers also discussed his thoughts on secular stagnation.Link

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Preparing for the Next Recession

Preparing for the Next Recession. Lawrence Summers, December 6, 2015, Opinion. “While debates about the role of secular stagnation in current economic conditions continue to rage, there is now almost universal acceptance of a crucial part of the argument — that the “neutral interest rate” has declined substantially and is likely to be lower in the future than in the past throughout the industrial world because of growing saving relative to investment. The idea that real interest rates — that is, interest rates adjusted for inflation — will be lower going forward is reflected in the pronouncements of policymakers such as Federal Reserve Chair… Link

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Larry Summers: This $13 trillion question is more important than ever

Larry Summers: This $13 trillion question is more important than ever. Lawrence Summers, November 10, 2015, Opinion. “The Hutchins Center for Fiscal and Monetary Policy at Brookings is having a conference on Tuesday launching an important new volume on federal debt management policy. Just as in the Great War it became clear that war is too important to be left to generals, so too in the Great Recession it became clear that (government) debt management is too important to be left to the parochial world of debt managers. The composition of federal debt is itself often a useful tool for economic policy, particularly in the current low-rate environment in which the Federal Reserve will frequently be unable to cut rates as much as it would like and will instead be reliant on “unconventional” policies intended to effect the price of government debt.Link

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The Permanent Effects of Fiscal Consolidations

The Permanent Effects of Fiscal Consolidations. Lawrence Summers, 2015, Paper, “The global financial crisis has permanently lowered the path of GDP in all advanced economies. At the same time, and in response to rising government debt levels, many of these countries have been engaging in fiscal consolidations that have had a negative impact on growth rates. We empirically explore the connections between these two facts by extending to longer horizons the methodology of Blanchard and Leigh (2013) regarding fiscal policy multipliers. Using data seven years after the beginning of the crisis as well as estimates on potential output our analysis suggests that attempts to reduce debt via fiscal consolidations have very likely resulted in a higher debt to GDP ratio through their negative impact on output.Link

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This Critique of the Fed isn’t Backed by Logic nor Evidence

This Critique of the Fed isn’t Backed by Logic nor Evidence. Lawrence Summers, October 28, 2015, Opinion. “My friends Mike Spence and Kevin Warsh, writing in yesterday’s Wall Street Journal, have produced what seems to me the single most confused analysis of US monetary policy that I have read this year (Brad DeLong has expressed related views). Unless I am missing something — which is certainly possible — they make a variety of assertions that are usually exposed as fallacy in introductory economics classes. My problem is not with their policy conclusion, though I do not share their highly negative view of QE.  There are many…Link

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Uniting Behind the Divisive ‘Cadillac’ Tax on Health Plans

Uniting Behind the Divisive ‘Cadillac’ Tax on Health Plans. N. Gregory Mankiw, Lawrence Summers, October 24, 2015, Opinion. “One of us, a former member of the Obama administration, remains a fan of the president. The other, not so much. But we agree on one thing: The excise tax on high-cost health care plans, the so-called Cadillac tax, is good policy. Congress should side with President Obama and resist calls to scrap it. Let’s start with the basics. Health insurance should be an ingredient of every family’s financial plan. Medical expenses are necessary and unpredictable, and they can be large. When a family receives an adverse health surprise…Link

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Foreword to “A Comparative Study of Two Global Crises”

Foreword to “A Comparative Study of Two Global Crises”. Graham Allison, Lawrence Summers, 2015, Book Chapter. “For the past decade, Liu He has been an influential economist and policy advisor in Beijing. An alumnus of the Harvard Kennedy School (MPA ’95), Liu was a trusted advisor to President Hu Jintao during the global financial crisis of 2008. Since Xi Jinping became president in 2012, he has emerged as Xi’s right-hand man on economic policy. As head of the Office of the Central Leading Group on Financial and Economic Affairs, comparable to the National Economic Council in the United States, Liu frames policy options for the Politburo Standing Committee and has been named in the press as “chief architect” of the major reform program announced at the conclusion of the Third Plenum in November 2013. At the Summit between Presidents Obama and Xi at Sunnylands, Liu was one of two assistants President Xi included in the conversations.Link

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