Found 277 article(s) for author 'Lawrence Summers'

Negative Nominal Interest Rates and the Bank Lending Channel

Negative Nominal Interest Rates and the Bank Lending Channel. Lawrence Summers, January 2019, Paper, “Following the crisis of 2008, several central banks engaged in a new experiment by setting negative policy rates. Using aggregate and bank level data, we document that deposit rates stopped responding to policy rates once they went negative and that bank lending rates in some cases increased rather than decreased in response to policy rate cuts. Based on the empirical evidence, we construct a macro-model with a banking sector that links together policy rates, deposit rates and lending rates. Once the policy rate turns negative, the usual transmission mechanism of monetary policy through the bank sector breaks down. Moreover, because a negative policy rate reduces bank profits, the total effect on aggregate output can be contractionary. A calibration which matches Swedish bank level data suggests that a policy rate of -0.50 percent increases borrowing rates by 15 basis points and reduces output by 7 basis points.Link

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There Is “Significant Risk” Of Recession

There Is “Significant Risk” Of Recession. Lawrence Summers, January 10, 2019, Video, “There is “significant risk” of a recession in the next two years, former U.S. Treasury Secretary Larry Summers repeated yesterday on Bloomberg TV. Summers, now an economist at Harvard University, focused his comments on China’s economy, which he warned was “seeing as difficult a moment… as any they’ve had in the last 10 or 20 years.” Link

 

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We must prepare now for the likelihood of a recession

We must prepare now for the likelihood of a recession. Lawrence Summers, January 7, 2019, Opinion, “When people are fundamentally healthy, they do not yet know what will cause their death. An economic recovery is healthy if it is not clear what will cause the next recession. By this standard, the recovery from the 2008 financial crisis, although disappointingly slow, has been healthy for most of the last decade.Link

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Can anything hold back China’s economy?

Can anything hold back China’s economy? Lawrence Summers, December 3, 2018, Opinion, “Presidents Trump and Xi Jinping reached an agreement over the weekend at the Group of 20 meeting in Argentina on a framework for trade dialogue that will delay the imposition of new U.S. tariffs. While surely better than the alternative, this step does not address any of the fundamental tensions in the economic relationship between the United States and China.Link

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The US-China conundrum

The US-China conundrum. Lawrence Summers, November 30, 2018, Video, “Former U.S. Treasury Secretary Larry Summers said America has an inalienable right to police unfair trade practices by major trading partners. “We, in the United States, need to be very clear, we are entitled and we are right to reject Chinese cheating, Chinese violation of the rules, rules that don’t cover unfair practices,” Summers said during an interview on FOX Business’ “WSJ At Large With Gerry Baker Opens a New Window. ” on Friday. ”We’re right when we’re against that.”Link

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50 percent chance of a US recession by 2020

50 percent chance of a US recession by 2020. Lawrence Summers, November 15, 2018, Video, “Former Treasury Secretary Larry Summers has put the chances of a U.S. recession at 50 percent within the next two years. The economist told CNBC’s Joumanna Bercetche on Thursday that a slowdown in growth was a “near certainty” before adding “the recession risk is nearly 50 percent over the next two years, maybe slightly less.Link

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Fed bashing is a fool’s game

Fed bashing is a fool’s game. Lawrence Summers, November 5, 2018, Opinion, “President Donald Trump has publicly and harshly rebuked Jay Powell, the chairman of the US Federal Reserve, for what he regards as misguided increases in interest rates that threaten continued economic expansion. As with much of what Mr Trump says and does, his way of doing business is counterproductive, irrespective of whatever merit his underlying position may have.Link

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Former Clinton Aide Larry Summers Pounds Trump Trade Strategy as ‘Very Erratic’

Former Clinton Aide Larry Summers Pounds Trump Trade Strategy as ‘Very Erratic‘. Lawrence Summers, October 17, 2018, Video, “The new North American trade agreement negotiated by the Trump Administration is slightly better than the original NAFTA, former Clinton Treasury Secretary Lawrence Summers admitted, but the negotiating techniques used to achieve it were too risky, he said.Link

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Fed needs to be mindful of lags between monetary policy and real economy

Fed needs to be mindful of lags between monetary policy and real economy. Lawrence Summers, October 5, 2018, Video, “Lawrence Summers, former Treasury secretary under President Bill Clinton and Harvard University president emeritus, joins ‘Squawk on the Street’ to discuss where the Fed’s mindset is on interest rates, inflationary pressures and the biggest economic risks.Link

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