Found 599 article(s) for author 'Monetary Policy'

Public borrowing is cheap but ramping up debt is not without risk

Public borrowing is cheap but ramping up debt is not without risk. Kenneth Rogoff, December 9, 2019, Opinion, “With interest rates on government debt at multi-decade lows, a number of leading economists have argued that almost every advanced economy can allow debt to drift up towards Japanese levels (over 150% of GDP even by the most conservative measure) without any great concern about long-term consequences. Advocates of much higher debt might be right, but they tend to downplay or ignore everything that can go wrong.Link

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Why Countries Should Tax Global Income

Why Countries Should Tax Global Income. Ricardo Hausmann, December 4, 2019, Opinion, “More inclusive global growth in a world with free capital mobility does not require a “global” government that taxes and redistributes, but it does require global taxation and tax cooperation. Countries should be free to set their own taxes, but they should be required to share tax-relevant information.Link

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Shrinking the Tax Gap: Approaches and Revenue Potential

Shrinking the Tax Gap: Approaches and Revenue Potential. Lawrence Summers, November 2019, Paper, “Between 2020 and 2029, the IRS will fail to collect nearly $7.5 trillion of taxes it is due. It is not possible to calculate with precision how much of this “tax gap” could be collected. This paper offers a naïve approach. The analysis suggests that with feasible changes in policy, the IRS could aspire to shrink the tax gap by around 15 percent in the next decade—generating over $1 trillion in additional revenue by performing more audits (especially of high-income earners), increasing information reporting requirements, and investing in information technology. These investments will increase efficiency and are likely to be very progressive.Link

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A GILTI High-Tax Exclusion Election Would Erode the U.S. Tax Base

A GILTI High-Tax Exclusion Election Would Erode the U.S. Tax Base. Stephen Shay, November 18, 2019, Paper, “This article responds to the Notice of Proposed Rulemaking under Sections 958 and 951A published in the Federal Register on June 21, 2019 (the “Proposed Regulations”).1 The proposed expansion of the high tax election should not be adopted for the reasons set out in this article, including most importantly that the statute does not provide a basis for the interpretation proposed to be adopted.Link

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A Quantity-Driven Theory of Term Premiums and Exchange Rates

A Quantity-Driven Theory of Term Premiums and Exchange Rates. Robin Greenwood, Samuel Hanson, Jeremy Stein, Adi Sunderam. 2019, Paper, “We develop a model in which risk-averse, specialized bond investors must be paid to absorb shocks to the supply and demand for long-term bonds in two currencies. Since long-term bonds and foreign exchange are both exposed to unexpected movements in short-term interest rates, our model naturally links the predictability of long-term bond returns to the predictability of foreign exchange returns. Specifically, a shift in the net supply of long-term bonds in one currency influences bond term premiums in both currencies as well as the foreign exchange rate between the two currencies. Our model matches several important empirical patterns, including the co-movement between exchange rates and bond term premiums as well as the finding that central banks’ quantitative easing policies impact not only local-currency long-term yields, but also foreign exchange rates. We also show that this quantity-driven approach provides a unified account explaining both why foreign exchange tends to outperform when the foreign interest rates exceed domestic rates and why long-term bonds tend to outperform when the yield curve is steep.Link

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Yes, our tax system needs reform. Let’s start with this first step

Yes, our tax system needs reform. Let’s start with this first step. Lawrence Summers, November 17, 2019, Opinion, “While there’s plenty of disagreement about how the money should be used, almost everyone involved in public-policy debates agrees that it would be good if the federal government could collect more revenue without raising tax rates or reducing tax deductions or credits.Link

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The High Stakes of the Coming Digital Currency War

The High Stakes of the Coming Digital Currency War. Kenneth Rogoff, November 11, 2019, Opinion, “Facebook CEO Mark Zuckerberg was at least half right when he recently told the United States Congress that there is no US monopoly on regulation of next-generation payments technology. You may not like Facebook’s proposed Libra (pseudo) cryptocurrency, Zuckerberg implied, but a state-run Chinese digital currency with global ambitions is perhaps just a few months away, and you will probably like that even less.Link

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Warren’s plan to finance Medicare-for-all pushes into dangerous and uncharted territory

Warren’s plan to finance Medicare-for-all pushes into dangerous and uncharted territory. Lawrence Summers, November 5, 2019, Opinion, “Democratic presidential candidate Elizabeth Warren last week mounted a passionate defense of universal government-provided health care and made a detailed case that it can be paid for without burdening the middle class. The vision of Medicare-for-all is immensely attractive and evokes health systems in other countries that perform much better than ours does. I could easily imagine supporting a well-designed Medicare-for-all plan.Link

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