Found 320 article(s) for author 'Lawrence Summers'

U.S. government should spend ‘whatever it takes’ to control virus

U.S. government should spend ‘whatever it takes’ to control virus. Lawrence Summers, March 26, 2020, Video, “Former Treasury Secretary Lawrence Summers has deep experience in economic policy. On Wednesday, he was among a bipartisan group of economic experts urging U.S. officials to prioritize resolving the pandemic’s medical emergency before trying to rectify its economic fallout. Summers joins Judy Woodruff to discuss direct payments to Americans, funding hospitals and the need for consistent strategy.Link

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Trump is missing the big picture on the economy

Trump is missing the big picture on the economy. Lawrence Summers, March 24, 2020, Opinion, “As an economist, I am normally enthusiastic when presidents or other political leaders emphasize the economic aspect of public policy issues. I am all for economic growth, cost benefit analyses, trade agreements, more flexible markets and prudent deregulation. Yet I am appalled by President Trump’s invocation of economic arguments as a basis for overriding the judgments of public health experts about battling the coronavirus pandemic.Link

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Declining worker power and American economic performance

Declining worker power and American economic performance. Lawrence Summers, March 18, 2020, Paper, “A decline in workers’ power, rather than an increase in corporations’ monopoly power, likely explains the co-existence of four significant trends in the U.S. economy since the early 1980s: a declining share of national income going to labor, increased market values of corporations, low average unemployment, and low inflation, says a paper to be discussed at the Brookings Papers on Economic Activity Conference March 19.Link

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Pelosi Virus-Relief Plan a Good Start, Needs ‘Much More’

Pelosi Virus-Relief Plan a Good Start, Needs ‘Much More’. Lawrence Summers, March 13, 2020, Video, Former U.S. Treasury Secretary Larry Summer discusses the outlook for negotiations between House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin over a coronavirus relief plan and the Trump administration’s relationship with the Federal Reserve. He speaks with Bloomberg’s David Westin on “Balance of Power.”Link

 

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What the Fed can do to help with with coronavirus’s economic aftershock

What the Fed can do to help with with coronavirus’s economic aftershock. Lawrence Summers, March 3, 2020, Opinion, “While the Fed acted preemptively Tuesday, it is still too early to say much that is definitive about the economic threat from coronavirus. We do know, however, that this is one of the most dangerous and disruptive disease outbreaks since World War I. Science and medicine have of course progressed massively since the 1918 Spanish flu. On the other hand, the world has nearly five times as many people now, and our interconnection is vastly greater, with 2.8 million people flying each day, in the United States alone, inside metal tubes with recirculating atmospheres. Large fractions of the world population live in places with little ability to carry out systematic health policies.” Link

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Accepting the Reality of Secular Stagnation

Accepting the Reality of Secular Stagnation. Lawrence Summers, March 2020, Opinion, “A fundamental difference between natural science theories and social science theories is that natural science theories, if valid, hold for all times and places. In contrast, the relevance of economic theories depends on context. Malthus’s theory of food availability was valid for the millennia before he formulated it, but not after the industrial revolution. Keynes’s ideas were much more valid during the Great Depression than during the inflationary 1970s.Link

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Data and code for: Automatic stabilizers in a low-rate environment

Data and code for: Automatic stabilizers in a low-rate environment. Lawrence Summers, February 16, 2020, Dataset, “In a world where monetary policy cannot assume responsibility for stabilization policy, there is a strong need for fiscal policy to address stabilization issues. In this context, we argue for “semi-automatic stabilizers” , aimed at reducing unemployment slumps rather than output recessions. We show that the hole left by the limits on monetary policy implies a large role for fiscal policy in general, and for semi-automatic stabilizers in particular. Finally, we argue that the design of stabilizers, whether they focus on mechanisms that rely primarily on income or on intertemporal substitution effects, depends crucially on the general design of discretionary policy.Link

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Automatic Stabilizers in a Low-Rate Environment

Automatic Stabilizers in a Low-Rate Environment. Lawrence Summers, February 2020, Paper, “Until the 2008–09 financial crisis, macroeconomic stabilization policy focused nearly exclusively on monetary policy. It made good sense. In terms of theory, if nominal rigidities are at the core of inefficient output fluctuations, monetary policy is exactly the right instrument to counter their adverse effects. In terms of practice, monetary policy is nimble and, by institutional design, largely protected from political winds. In terms of outcomes, the Great Moderation—the stability of output and inflation over more than 20 years (from the mid-1980s to 2007)— seemed to confirm the wisdom of that choice.Link

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Automatic stabilizers in a low-rate environment

Automatic stabilizers in a low-rate environment. Lawrence Summers, 2020, Paper, “With interest rates persistently low or even negative in advanced countries, policymakers have barely any room to ease monetary policy when the next recession hits. Fiscal policy will have to play a major and likely dominant role in stimulating the economy, requiring policymakers to fundamentally reconsider fiscal policy. Blanchard and Summers argue for the introduction of what they call “semiautomatic” stabilizers. Unlike purely automatic stabilizers (mechanisms built into government budgets that automatically—without discretionary government action or explicit triggers—increase spending or decrease taxes when the economy slows or enters a recession), semiautomatic stabilizers are targeted tax or spending measures that are triggered if, say, the output growth rate declines or the unemployment rate increases beyond a specified threshold. The authors argue that the trigger should be changes in unemployment rather than changes in output, and the design of semiautomatic stabilizers, whether they focus on mechanisms that rely primarily on income or on intertemporal substitution effects (changing the timing of consumption), depends crucially on the design of discretionary policy.Link

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