Found 382 article(s) for author 'Monetary Policy'

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

Tags: , , , ,

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

Tags: , ,

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

Tags: , , ,

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

Tags: , , ,

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

Tags: , , ,

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

Tags: , , ,

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

Tags: , , ,

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

Tags: , , , , , ,

The Fed Shouldn’t Expect People to Trust its Current Approach to the Economy

The Fed Shouldn’t Expect People to Trust its Current Approach to the Economy. Lawrence Summers, August 29, 2016, Opinion, “I had high hopes for the Federal Reserve’s annual conference in Jackson Hole, Wyo. The conference was billed as a forum that would look at new approaches to the conduct of monetary policy — something that I have been urging as necessary, given secular stagnation risks and the sharp decline in the apparent neutral rate of interest. And Chair Janet Yellen’s speech in a relatively academic setting provided an opportunity to signal that the Fed recognized that new realities required new approaches.Link

Tags: , , , ,