Found 82 article(s) for author 'Martin Feldstein'

Slowing the growth of U.S. debt

Slowing the growth of U.S. debt. Martin Feldstein, November 11, 2013, Opinion. “The recently established House-Senate budget negotiating committee presents the opportunity to solve two major national problems: preventing the future explosion of the national debt and increasing current growth and employment. These problems have to be solved together. Because monetary policy can do very little to stimulate demand, to have faster growth and more jobs, we need a program of infrastructure spending and pro-investment tax changes. But it would be irresponsible to add…” Link verified March 28, 2014

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A weak euro is Europe’s best means of beating deflation

A weak euro is Europe’s best means of beating deflation. Martin Feldstein, November 7, 2013, Opinion. “The European Central Bank responded correctly to recent news of very low eurozone inflation by loosening policy further. The big question now is whether its decision – reducing the main financing rate from 0.5 to 0.25 per cent – will have a big enough impact to move inflation from less than 1 per cent a year back close to the ECB’s target of 2 per cent. The answer to this question lies in the foreign exchange markets. A lower short-term interest rate will certainly not, by itself, raise inflation through increased spending by businesses and…”  May require purchase or user account. Link verified April 3, 2014

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The Taper Chase

The Taper Chase. Martin Feldstein, September 30, 2013, Opinion. “Global financial markets were stunned when the US Federal Reserve announced on September 18 that it was not ready to begin the widely anticipated reduction in the pace of its “quantitative easing” (QE) program. Fed Chairman Ben Bernanke said that the Fed would continue its monthly purchases of $85 billion of long-term securities. Understanding the reasons for the Fed’s unexpected change of plans may help to anticipate what is coming next. After Bernanke announced in May that the Fed intended to “taper” QE, investors began to expect that some reduction in the pace of asset purchases might begin in the early fall…” Link

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The Fed is wrong to put off the return to normality

The Fed is wrong to put off the return to normality. Martin Feldstein, September 22, 2013, Opinion. “The US Federal Reserve’s decision last week to delay the start of its so-called “tapering” has confused investors about the reliability of its forward guidance. It has also created a trap that will make it difficult to start the tapering programme in the future unless the Fed changes its basic approach. More specifically, Ben Bernanke, the Fed chair, explained that the Federal Open Market Committee (FOMC) had decided not to reduce its pace of bond-buying because current economic conditions were not as favourable as the FOMC members had expected in June Link verified April 3, 2014

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How to Create a Real Economic Stimulus

How to Create a Real Economic Stimulus. Martin Feldstein, September 16, 2013, Opinion. “Earlier this year, former U.S. Treasury Secretary Larry Summers expressed doubts about the Federal Reserve’s quantitative easing policy of buying $85 billion a month of government bonds and other long-term assets. His skepticism antagonized some Fed insiders and liberal Democrats, who recently opposed his consideration by President Obama as the next Fed chairman. When Mr. Summers on Sunday withdrew his candidacy for the chairman’s job, there was one immediate benefit…” Link

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US Interest Rates Will Continue to Rise

US Interest Rates Will Continue to Rise. Martin Feldstein, August 28, 2013, Opinion. “Six months ago, I wrote that long-term interest rates in the United States would rise, causing bond prices to fall by so much that an investor who owned ten-year Treasury bonds would lose more from the decline in the value of the bond than he would gain from the difference between the bonds’ interest rate and the interest rates on short-term money funds or bank deposits. That warning has already proved to be correct. The interest rate on ten-year Treasury bonds has risen almost a full percentage point since February, to 2.72%, implying a loss of nearly 10% in the price of the bond…” Link verified April 3, 2014

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Decoding Bernanke

Decoding Bernanke. Martin Feldstein, July 29, 2013, Opinion. “Federal Reserve Chairman Ben Bernanke has been struggling to deliver a clear message about the future of Fed policy ever since his May 22 testimony to the US Congress. Indeed, two months later, financial-market participants remain confused about what his message means for the direction of US monetary policy and market interest rates. Bernanke’s formal statements about the Fed’s two unconventional policies have been clear. First, the Fed is trying to give relatively specific guidance about the future path of the federal funds rate (the overnight rate at which commercial banks lend to each other)…” Link verified March 28, 2014

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Martin Feldstein interviews Paul Volcker about Monetary Policy

Martin Feldstein interviews Paul Volcker about Monetary Policy. Martin Feldstein, July 10, 2013, Video. “Martin Feldstein interviewed Paul Volcker on July 10, 2013 regarding The First 100 Years of the Federal Reserve – The Policy Record, Lessons Learned, and Prospects for the Future. Martin Feldstein is George F. Baker Professor of Economics, Harvard University, and President Emeritus, National Bureau of Economic Research, both in Cambridge, Massachusetts…” Link verified April 3, 2014

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An end to austerity will not boost Europe

An end to austerity will not boost Europe. Martin Feldstein, July 9, 2013, Opinion. “The eurozone periphery is on a risky path to end fiscal austerity and accept larger budget deficits. Portugal is the most recent dramatic shift in that direction; Italy, Spain and even France are also abandoning plans to cut spending and raise taxes. This move away from budget discipline reflects a combination of popular political pressure, more accommodating bond markets and encouragement from the International Monetary Fund. But ending fiscal austerity is not a strategy for achieving growth. It will reduce downward pressure on aggregate spending but will not lift growth and employment…” Link verified March 28, 2014

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The Fed Should Start to ‘Taper’ Now

The Fed Should Start to ‘Taper’ Now. Martin Feldstein, July 2, 2013, Opinion. “The Federal Reserve should begin now to end its program of long-term asset purchases. It should not wait for the improved labor market that it predicts will come later this year, an improvement that is unlikely to occur. Instead, the Fed should emphasize that the pace of quantitative easing must adjust to the likely effectiveness of the program itself, and to the costs and risks of continuing to buy large quantities of bonds. Although the economy is weak, experience shows that further bond-buying will have little effect on economic growth and employment. Meanwhile, low interest rates are generating excessive risk-taking…” Link verified April 3, 2014

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