Found 529 article(s) for author 'Monetary Policy'

Jeremy Stein on income inequality, monetary policy and the bond market, and preventing the next financial crisis

Jeremy Stein on income inequality, monetary policy and the bond market, and preventing the next financial crisis February 2019. GrowthPolicy’s Devjani Roy interviewed Jeremy Stein, the Moise Y. Safra Professor of Economics and Chairman of the Department of Economics at Harvard University, on income inequality, monetary policy and the bond market, and preventing the next […]

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Who’s Afraid of Budget Deficits?

Who’s Afraid of Budget Deficits? Jason Furman, Lawrence Summers, January 27, 2019, Opinion, “The United States’ annual budget deficit is set to reach nearly $1 trillion this year, more than four percent of GDP and up from $585 billion in 2016. As a result of the continuing shortfall, over the next decade, the national debt—the total amount owed by the U.S. government—is projected to balloon from its current level of 78 percent of GDP to 105 percent of GDP. Such huge amounts of debt are unprecedented for the United States during a time of economic prosperity.Link

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Do Tax Cuts Produce More Einsteins? The Impact of Financial Incentives vs. Exposure to Innovation on the Supply of Inventors

Do Tax Cuts Produce More Einsteins? The Impact of Financial Incentives vs. Exposure to Innovation on the Supply of Inventors. Raj Chetty, January 2019, Paper, “Many countries provide financial incentives to spur innovation, ranging from tax incentives to research and development grants. In this paper, we study how such financial incentives affect individuals’ decisions to pursue careers in innovation. We _first present empirical evidence on inventors’ career trajectories and income distributions using de-identified data on 1.2 million inventors from patent records linked to tax records in the U.S. We find that the private returns to innovation are extremely skewed – with the top 1% of inventors collecting more than 22% of total inventors’ income – and are highly correlated with their social impact, as measured by citations. Inventors tend to have their most impactful innovations around age 40 and their incomes rise rapidly just before they have high-impact patents. We then build a stylized model of inventor career choice that matches these facts as well as recent evidence that childhood exposure to innovation plays a critical role in determining whether individuals become inventors.Link

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The Euro’s First 20 Years

The Euro’s First 20 Years. Jeffrey Frankel, January 25, 2019, Opinion, “According to public opinion polls, 20 years after its introduction, the euro is highly popular, with 64% of eurozone citizens supporting the common currency. This offers hope that, if the eurozone’s leaders can learn from past mistakes, the monetary union will survive and even thrive in the future.Link

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Rogoff Says World Lacks an `A-Team’ to Deal With a New Financial Crisis

Rogoff Says World Lacks an `A-Team’ to Deal With a New Financial Crisis. Kenneth Rogoff, January 23, 2019, Video, “Harvard Professor Kenneth Rogoff discusses the U.S. government shutdown and the global financial industry’s preparedness for a crisis. He also discusses Brexit and China’s slowdown at the World Economic Forum’s annual meeting in Davos, Switzerland, on “Bloomberg Surveillance.” Link

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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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Risks to the Global Economy in 2019

Risks to the Global Economy in 2019. Kenneth Rogoff, January 11, 2019, Opinion, “Over the course of this year and next, the biggest economic risks will emerge in those areas where investors think recent patterns are unlikely to change. They will include a growth recession in China, a rise in global long-term real interest rates, and a crescendo of populist economic policies.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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