Found 537 article(s) for author 'Monetary Policy'

Evolution or Revolution? Rethinking Macroeconomic Policy after the Great Recession

Evolution or Revolution? Rethinking Macroeconomic Policy after the Great Recession. Lawrence Summers, 2019, Book, “Leading economists discuss post–financial crisis policy dilemmas, including the dangers of complacency in a period of relative stability. The Great Depression led to the Keynesian revolution and dramatic shifts in macroeconomic theory and macroeconomic policy. Similarly, the stagflation of the 1970s led to the adoption of the natural rate hypothesis and to a major reassessment of the role of macroeconomic policy. Should the financial crisis and the Great Recession lead to yet another major reassessment, to another intellectual revolution? Will it? If so, what form should it, or will it, take? These are the questions taken up in this book, in a series of contributions by policymakers and academics. The contributors discuss the complex role of the financial sector, the relative roles of monetary and fiscal policy, the limits of monetary policy to address financial stability, the need for fiscal policy to play a more active role in stabilization, and the relative roles of financial regulation and macroprudential tools. The general message is a warning against going back to precrisis ways—to narrow inflation targeting, little use of fiscal policy for stabilization, and insufficient financial regulation.Link

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Fair, comprehensive tax reform is the right path forward

Fair, comprehensive tax reform is the right path forward. Lawrence Summers, March 28, 2019, Opinion, “Over the last several weeks, we have paid careful attention to tax proposals by Representative Alexandria Ocasio-Cortez of New York, for a 70 percent marginal tax rate on top earners, and by Senator Elizabeth Warren of Massachusetts, for a wealth tax on those worth more than $50 million.Link

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A broader tax base that closes loopholes would raise more money than plans by Ocasio-Cortez and Warren

A broader tax base that closes loopholes would raise more money than plans by Ocasio-Cortez and Warren. Lawrence Summers, March 28, 2019, Opinion, “Tax reform debates have been transformed in recent weeks by a shift in emphasis from revenue raising and progressivity to an emphasis on going after the rich for the sake of equality and justice. Bold proposals from Representative Alexandria Ocasio-Cortez of New York, for a 70 percent marginal tax rate on top earners, and from Senator Elizabeth Warren of Massachusetts — a 2020 Democratic presidential candidate — for a wealth tax on those worth more than $50 million have attracted widespread attention.Link

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The left’s embrace of modern monetary theory is a recipe for disaster

The left’s embrace of modern monetary theory is a recipe for disaster. Lawrence Summers, March 4, 2019, Opinion, “We’ve seen this movie before. There is widespread frustration with the performance of the economy. Traditional policy approaches are not delivering hoped-for results. A relatively unpopular president is loathed to an unusual extent by a frustrated opposition party that lost the previous presidential election while running a pillar of its establishment. And altered economic conditions have led to the development of new economic ideas that reflect a significant break with previous orthodoxy.Link

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Modern Monetary Nonsense

Modern Monetary Nonsense. Kenneth Rogoff, March 4, 2019, Opinion, “A number of leading progressive US politicians advocate using the Federal Reserve’s balance sheet to fund expansive new government programs. Although their arguments have a grain of truth, they also rest on some fundamental misconceptions, and could have unpredictable and potentially serious consequences.Link

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Immigration and Preferences for Redistribution in Europe

Immigration and Preferences for Redistribution in Europe. Alberto Alesina, February 2019, Paper, “We examine the relationship between immigration and attitudes toward redistribution using a newly assembled data set of immigrant stocks for 140 regions of 16 Western European countries. Exploiting within-country variations in the share of immigrants at the regional level, we find that native respondents display lower support for redistribution when the share of immigrants in their residence region is higher. This negative association is driven by regions of countries with relatively large Welfare States and by respondents at the center or at the right of the political spectrum. The effects are also stronger when immigrants originate from Middle-Eastern countries, are less skilled than natives, and experience more residential segregation. These results are unlikely to be driven by immigrants’ endogenous location choices.Link

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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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Trend, Seasonal, and Sectoral Inflation in the Euro Area

Trend, Seasonal, and Sectoral Inflation in the Euro Area. James Stock, January 27, 2019, Paper, “An unobserved components model with stochastic volatility is used to decompose aggregate Euro area HICP inflation into a trend, seasonal and irregular components. Estimates of the components based only on aggregate data are imprecise: the width of 68% error bands for the seasonally adjusted value of aggregate inflation is 1.0 percentage points in the final quarter of the sample. Estimates are more precise using a multivariate model for a 13-sector decomposition of aggregate inflation, which yields a corresponding error band that is roughly 40% narrower. Trend inflation exhibited substantial variability during the 2001-2018 period and this variability closely mirrored variation in real activity.Link

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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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