Economics Roundtable
Graph-of-the-Year Candidates
Donald Marron likes European interest rates. Click on the image to get a bigger version. Can you find three distinct subperiods?
Brad DeLong favors the U.S. gdp gap.
Finally, it's hard to argue against the payroll employment graph below (straight from FRED) and the comparison across recessions (courtesy of Calculated Risk).
Looking Up At 2001
In February 2001, U.S. payroll employment peaked at 132.5 million. The November 2011 figure of 131.7 million still falls 800,000 jobs short of the earlier peak.
Click on the chart for a larger version.
November Payroll Employment
Remember M1?
Money Supply M1 growth is now over 20% per year over a 12 month lag. M1 growth has touched 20% before, but not with excess reserves of $1.6 trillion. Where is M1 headed?
Click on the chart for a larger version.
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January 25, 2012, 2:36 am, 945496
I was at the State of the Union tonight. You cannot help but love the pomp and circumstance of the event, even if you do not agree with everything the President says. In this case, his opening lines on what we can learn from America's âgeneration of ...
January 22, 2012, 12:35 am, 944302
Yesterday I spent the day visiting the TV studios of CNBC, Bloomberg Television, and the Fox Business Network to discuss my new book First Principles. Thanks to the news anchors the discussionâand debateâwas interesting and lively.
I started early, co-hosting Squawk Box from 7 ...
I started early, co-hosting Squawk Box from 7 ...
January 18, 2012, 6:35 pm, 943166
Alan Blinder and I are frequently on different sides of economic debates, especially when it comes to the effects of monetary and fiscal policy and the impact of short-term discretionary actions. For example, we have both testified together in Congress about the recent stimulus packages. He ...
January 13, 2012, 4:35 am, 941297
Economic freedom in the United States continues to decline according to the latest Index of Economic Freedom (compiled by the Heritage Foundation) as reported today by Ed Feulner in the Wall Street Journal.
January 8, 2012, 2:35 am, 939224
In yesterdayâs Wall Street Journal, Austan Goolsbee argues that Washington Isn't Spending Too Much. "Itâs completely normal,â he says âthat spending rises during big downturnsâŚ.As the economy grows back to health, the government share of the economy will fall,â making it seem as if the Administrationâs ...
December 31, 2011, 10:35 am, 936861
This month marks the ten-year anniversary of Argentinaâs massive sovereign debt default, an event with many lessons for the European sovereign debt crisis of today, though analogies are far from perfect.
First, as has been discussed and debated on planet money and naked ...
First, as has been discussed and debated on planet money and naked ...
December 21, 2011, 4:35 am, 933912
This fall was a great quarter to teach the introductory course (Economics 1 at Stanford) with plenty of good examples from Occupy Wall Street, the crisis in Europe, the continuing debate in Washington over economic policy, and the ...
December 20, 2011, 4:35 am, 933408
People are writing about economic freedom a lot these days. George Willâs recent Washington Post column ...
December 8, 2011, 2:35 am, 928982
Paul Krugman is wrong in his criticism of my brief summary of last weekâs economic policy conference at Stanfordâs Hoover Institution. Krugman was not at the conference, which lasted a full day and went well beyond previous research by the participants. In general people focused on ...
December 6, 2011, 4:35 am, 928064
Why has the recovery been so slow? What can we do about it? Alan Greenspan, George Shultz, Ed Prescott, Steve Davis, Nick Bloom, John Cochrane, Bob Hall, Lee Ohanian, John Cogan and I recently met at the Hoover Institution at Stanford to present papers and discuss ...
November 22, 2011, 2:35 am, 923324
Christina Romer gave a speech at Hamilton College earlier this month which criticizes my findings that recent temporary tax rebates had little or no effect on aggregate consumption. Romer claims that in analyzing this ârelationship between two variablesâ I did not consider the impact of ...
November 19, 2011, 2:35 am, 922503
Several people have asked me to comment on nominal GDP targeting, as recently proposed by Scott Sumner, Christina Romer and Paul Krugman. I did research on nominal GDP targeting many years ago and found that such targeting proposals had a number of problems, ...
November 11, 2011, 12:35 pm, 919610
We just finished Week 7, and Lecture 27, in Economics 1 with a midterm exam coming up next week. What a great time to be teaching and learning economics, with the questions about the bailouts and the top 1 percent coming out of OWS, debate over ...
November 2, 2011, 4:35 am, 915597
My Wall Street Journal article today is quite critical of recent interventionist fiscal and monetary policies in the United States. In my view, they have not only been unhelpful to the American economy, they have also been unhelpful to the world economy. The monetary and ...
October 27, 2011, 4:35 am, 913270
How should the introductory economics text change in response the financial crisis, the recession and the very slow recovery? The question will be discussed at a big economics teachersâ conference in New Orleans this ...
October 11, 2011, 12:34 am, 907036
The Nobel Prize committee made an excellent choice in awarding the 2011 economics prize to Tom Sargent and Chris Sims for their influential contributions to macroeconomics.
One of the first papers of Tom Sargent I read was his little âNote on the Accelerationist Controversyâ published ...
One of the first papers of Tom Sargent I read was his little âNote on the Accelerationist Controversyâ published ...
October 7, 2011, 2:34 pm, 906115
Today's NPR Morning Edition presented two sides to the question "Does The Economy Need A Little Inflation?" By "a little" they mean 5 percent per year for a few years. The former IMF chief economist and Harvard professor Ken Rogoff argued in the affirmative and was featured ...
October 6, 2011, 10:34 pm, 905849
âWhatâs past is prologue,â says Future, the statue at the National Archives. But in macroeconomic policyâmonetary and fiscalâthe past is often misrepresented, and that unfortunately leads Future astray. A common misrepresention these days pertains to past views of economists about monetary and fiscal policy. Consider David Frumâs recent ...
October 4, 2011, 10:34 pm, 904899
My oped today with John Cogan in the Wall Street Journal shows that temporary fiscal stimulus packages are not good politics. Historical evidence reveals that politicians who enact them tend not to get re-elected.
October 4, 2011, 2:35 am, 904447
Those of us who teach economics stand on the shoulders of those who taught us economics.
I just heard the sad news that one of my truly extraordinary economics teachers, E. Philip Howrey, recently died in a biking accident. When I was an undergraduate, ...
I just heard the sad news that one of my truly extraordinary economics teachers, E. Philip Howrey, recently died in a biking accident. When I was an undergraduate, ...
September 27, 2011, 2:34 am, 901787
I find the first day of the school year to be exciting, especially when a lot of first-year students are in my classes as is the case with Economics 1, the introductory economics course I teach at Stanford and the course which this blog is named after. ...
September 25, 2011, 4:34 pm, 901296
Simulations of Mark Zandiâs economic model, which are reported in the press to show that a new temporary stimulus package will create 1.9 million jobs, are being touted as evidence that it will work. This is the same type of model simulation that predicted the very similar 2009 stimulus ...
September 17, 2011, 8:34 pm, 898433
The Fed's dual mandate of âmaximum employmentâ and âstable pricesâ is in the news again. At the recent presidential debate, the major Republican candidates made the case for repealing the dual mandate, while the President of the ...
September 14, 2011, 2:34 am, 896808
Congress was busy working on fiscal policy today. This morning, over on the House side, it held its first hearing on President Obamaâs fiscal stimulus proposal. As one of the witnesses, I argued that the fiscal policy responses thus far to the unemployment problem have not been ...
September 9, 2011, 10:34 am, 895195
Few Americans now remember that the United States launched its first post-9/11 attack on terrorists from a very unusual frontâthe financial front. As President George W. Bush put it, âthe first shot in the war was when we started cutting off their money, because ...
September 7, 2011, 4:35 am, 894134
Here is my New York Times oped Not More of the Same on why it is urgent to change the course of economic policy.
My critique of Keynesian countercyclical policy, which is summarized in the NYT article, has been challenged by Fred Bergsten of the Peterson Institute who said at ...
My critique of Keynesian countercyclical policy, which is summarized in the NYT article, has been challenged by Fred Bergsten of the Peterson Institute who said at ...
September 3, 2011, 8:34 pm, 893245
With the 10-year anniversary of 9/11 approaching people have been asking me to write about the impact of 9/11 on economic policy making in Washington, where I ran the international division of the U.S. Treasury at the time, and to reflect on how the world ...
August 25, 2011, 2:34 am, 889845
You cannot really understand monetary economics or monetary policy without knowing economic history. No self-respecting monetary economist goes to work without knowing the ins and outs of historical periods like the Depression of the 1930s or great works on such periods, such as Milton Friedman and ...
August 21, 2011, 4:34 pm, 888292
Quantitative Easing (both I and II) has caused the monetary baseâthe sum of currency and bank reservesâto explode in the past three years, but has not resulted in similarly large increases in the growth of broader measures of the money supply such as M2. Instead banks have ...
August 19, 2011, 10:34 pm, 888011
There is so much more for people to learn about the various Medicare proposals out there. Many people I talked to were surprised to learn that both the Ryan and the Obama Medicare proposals reduce the growth of federal outlays on Medicare by ...
August 16, 2011, 2:34 am, 886228
Sundayâs Weekend Edition on NPR gave listeners a chance to hear different economic views on how to reduce the high unemployment rate. Joe Stiglitz represented the view that we need another deficit-financed stimulus package with more spending now and tax increases later. I represented the view ...
August 12, 2011, 4:34 am, 885053
In televised speech on Sunday evening August 15, 1971, Richard Nixon shocked the world with these words: âI am today ordering a freeze on all wages and prices throughout the United States for a period of 90 days,â (see video) and âI have ...
August 10, 2011, 2:34 am, 884130
The book Reckless Endangerment by Gretchen Morgenson and Joshua Rosner is filled with examples of regulatory capture which the authors uncovered in their investigative reporting of the financial world. Here is my review in the Washington Post. Many of the examples are useful for ...
August 7, 2011, 10:34 pm, 883177
Two years age in an article in the Financial Times I wrote that âStandard and Poorâs decision to downgrade⌠should be a wake-up call for the US Congress ...
August 7, 2011, 2:34 am, 882984
The White House and the Treasury are accusing Standard and Poorâs of making an elementary arithmetic mistake in the recent downgrade decision. Treasuryâs John Bellows writes about what ...
August 3, 2011, 4:34 am, 881388
Tonightâs NewsHour debate between me and Robert Reich was about the role of Keynesian fiscal policy in the context of the todayâs budget agreement. Reich was not supportive of the agreement because ...
August 2, 2011, 12:34 am, 880917
Many are still debating how much was accomplished in the debt/budget agreement approved by the House today with the Senate to vote and the president to sign tomorrow. In my view, much was accomplished, and credit goes to all those who have been laying out the ...
July 29, 2011, 12:34 pm, 879923
The sad economic story in this morningâs GDP release can best be told with three simple charts.
First, economic growth in this recovery has been even slower than previously thought, and has averaged less than 1 percent so far this year. This is the main reason ...
First, economic growth in this recovery has been even slower than previously thought, and has averaged less than 1 percent so far this year. This is the main reason ...
July 28, 2011, 2:34 am, 879269
Today the CBO released its updated score of the Boehner budget proposal and the Reid budget proposal. So we can now do an apples-to-apples comparison of the year-by-year numbers in the two plans, and thereby get a better understanding of the differences between ...
July 20, 2011, 2:34 am, 876322
In the latest edition of his excellent series of podcast interviews, Russ Roberts asked me toward the end what I thought about being characterized as anti-Keynesian as I was in this Economist post The rise of the anti-Keynesians. In a follow-up to the Economist article, David Altig, with ...
July 13, 2011, 12:34 pm, 874204
In a column posted today on Bloomberg Views I suggested a way to resolve the budget impasse. It starts with the fact that about $6 trillion in deficit reduction is needed over 10 years to get to balanced budget.The proposal is that the President and the Congress agree now to ...
July 8, 2011, 6:34 pm, 872911
Todayâs jobs report provides yet more evidence that this is a recovery in name only. The 9.2 percent unemployment rate is certainly a serious problem, but you can understand the problem a little better by looking at the percentage of working-age Americans who are actually working. This percentage declined again ...
July 5, 2011, 2:34 am, 871286
Whatâs the best way forward for American economic policy? On Independence Day itâs natural to look to the countryâs founding principlesâpolitical freedom and economic freedomâfor an answer. 1776 was the not only the year when Thomas Jefferson wrote the Declaration of Independence, it was the year when Adam Smith wrote ...
July 4, 2011, 2:34 am, 871078
Paul Krugman writes (citing Noah Smith) that he agrees with the empirical findings in my critique of the revival of Keynesian activism in the 2000s (the stimulus packages of 2001, 2008 and 2009). In particular, he writes that âitâs far from clear that the ARRA actually led ...
July 1, 2011, 2:35 am, 870187
Predictions made in early 2009 about whether the stimulus package would work varied widely because the models used to make the predictions varied widely. Models used by Christy Romer and Jared Bernstein predicted large effects of the 2009 stimulus (ARRA), while models used by John Cogan, Tobias Cwik, Volker ...
June 24, 2011, 4:35 pm, 868176
CBOâs Long-Term Budget Outlook released this week is essentially the same as last yearâs: without a change in policy the debt will explode to over 900 percent of GDP. One difference is that CBO decided not to print out the debt ratio in their spread sheet âData Underlying Scenarios ...
June 22, 2011, 12:35 am, 867039
This month marks the two-year anniversary of the end of recession and start of recovery. But itâs a recovery in name only, so weak as to be nonexistent. And it has been weak from the start. Real GDP growth has averaged only 2.8 percent per year compared with 7 percent ...
June 17, 2011, 4:35 am, 865404
Asgeir Jonssonâs interesting and perceptive article in todayâs Wall Street Journal provides a clear lesson for students and policymakers alike about the harm that comes from bailouts and the good that comes from avoiding them. If a government recognizes the reality of a solvency problem early, and deals with ...
June 11, 2011, 6:35 pm, 863452
Some skeptics have complained about the 5% national economic growth target put forth by former Minnesota Governor Tim Pawlenty in his speech this week about his economic plan. They say it canât be done. But I think the goal makes a great deal of sense. It would focus ...
June 9, 2011, 8:35 pm, 862961
In todayâs article in Bloomberg View I explore reasons for the current weak recovery, and in particular whether there is an analogy with what happened in the recession of 1937-38 which interrupted the recovery from the Great Depression. Several charts elaborate on numbers provided there which argue against such ...
June 6, 2011, 6:35 am, 861369
Last week at Stanford the American Economic Association hosted its first conference ever on teaching economics. It was a great success and a second conference will be held in Boston next year, sponsored by the Journal of Economic Education (JEE).
I was asked to speak ...
I was asked to speak ...
June 3, 2011, 12:35 am, 860609
The Wall Street Journalâs headline for my article today In Praise of Debt Limit âChickenâ nicely conveys the idea that linking a hike in the debt to a cut in spendingâwhich pundits call a game of chickenâis not a game at all. Itâs good economic policy. Economists in Washington ...
May 31, 2011, 8:35 pm, 859664
Over at Market Beat: WSJ.com's inside look at the markets, Mark Gongloff reports that Standard Charteredâs David Semmens says that âBased on a strict Taylor-rule calculation, the first effective fed-funds rate increase shouldnât come until the first quarter of 2013.â
And over at Business Insider, Art ...
May 31, 2011, 2:35 pm, 859522
When the Senate voted down the House Budget Resolution (the Ryan budget) by a vote of 40-57, it also voted down an Obama Administration budget (submitted in February) by a vote of 0-97. But the Obama Administration had already discarded that budget when President Obama outlined in general terms a ...
May 31, 2011, 2:35 am, 859286
This year I was honored to speak at Stanfordâs Memorial Day military appreciation barbecue. There are now 51 enrolled Stanford students who are veterans. I was once a Stanford student veteran. In 1969 I temporarily left Stanfordâs Ph.D. program in economics for a tour in the Navy. That year the ...
May 30, 2011, 6:35 pm, 859259
My review of the book Reckless Endangerment by Gretchen Morgenson and Joshua Rosner (published in yesterdayâs Washington Post) gives examples of the many ways in which cozy relations between government and industry lead to reckless policies. Students of economics will recognize the problem as regulatory capture, which
May 28, 2011, 8:35 pm, 858958
On PBS NewsHour yesterday Peter Thiel argued that the opportunity cost of college may be surprisingly high for many students, and indeed, as widely reported this past week, he raised the opportunity cost for some impressive 20 Under 20 prize-winning entrepreneurs. Economist Richard Vedder was on Peter's ...
May 27, 2011, 2:35 am, 858521
In this Bloomberg Echoes post, I argue that the United States should do whatever it can to promote economic freedom in the post Jasmine Revolution Middle East and North Africa, and strongly support economic leaders who are committed to creating a private market economy. This is the lesson learned ...
May 23, 2011, 12:35 am, 856760
During the panic in the fall of 2008 some interpreted the explosion of the Fed's balance sheet and the monetary base (MB)âcurrency plus reserves of banks at the Fedâas an appropriate monetary policy response to a shift in the demand for the monetary base. That monetary policy should try to ...
May 18, 2011, 4:35 pm, 855549
For months now top economic officials in Washington have been arguing that the Congress should vote to increase the debt limit without any reductions in the growth of spendingâin other words a âclean debt limit hike.â Just last Thursday Ben Bernanke compared linking the debt limit and spending reductions ...
May 14, 2011, 12:35 pm, 854135
Paul Krugman returned to the debate with me about federal spending in his New York Times column yesterday. He says that federal spending cannot be brought back from its current high levels to the 19 to 20 percent range as a share of GDP, which we saw as ...
May 11, 2011, 4:35 am, 852882
Patrick McGroarty and Farai Mutsaka have a great article in the Wall Street Journal about this famous one hundred trillion dollar note from Zimbabwe,including the fact that I carry one ...
May 8, 2011, 4:35 pm, 851931
The plan to use Moammar Gadhafiâs frozen assets to fund the Libyan rebels faces legal obstacles according to this weekendâs Wall Street Journal story "Obstacles Loom on Path To Funding Libyans." This reminds me of the plan to use Saddam Husseinâs frozen assets to fund payments to the Iraqi ...
May 7, 2011, 4:35 pm, 851794
Proponents of Quantitative Easing frequently citeâinappropriately in my viewâthe Taylor Rule as support, saying that the rule calls for a federal funds rate as low as minus 6 percent, well below the zero bound. But in various pieces over the past year, such as Taylor Rule Does Not Say ...
May 6, 2011, 4:35 am, 851339
Title II of the Dodd-Frank bill, which creates a new orderly liquidation authority for financial institutions, has recently come under fierce attacks from a variety of perspectives. Paul Ryan writing in the Wall Street Journal on April 5 argues that we should get ârid of the permanent Wall Street bailout ...
May 3, 2011, 10:35 am, 850008
Anyone who has served in the military during the nearly ten years since 9/11 must feel a sense of closure with Bin Ladenâs death. As Lindsay Wise writes in the Houston Chronicle âBin Laden's death is a dramatic morale booster for those who served in the war on terror, ...
April 28, 2011, 6:35 pm, 848637
As a respite from comparing the âKeynesian crossâ versus the âdynamic stochastic general equilibriumâ model, watch this âKeynesâ versus âHayekâ video with lyrics written by John Papola and my colleague Russ Roberts. But my favorite lines are more micro than macro:
Keynes: âEven you must admit that the lesson ...
Keynes: âEven you must admit that the lesson ...
April 28, 2011, 4:35 am, 848254
The running debate between Paul Krugman and me is bringing more facts to bear on important budget and policy issues. Since I wrote my reply yesterday to Krugmanâs criticism of my Wall Street Journal article, he has responded three times, with Taylor Digs Deeper, 2021 ...
April 26, 2011, 8:35 pm, 847611
Yesterday Paul Krugman, citing Brad DeLong's post earlier in the day, joined the commentary on my Wall Street Journal article of Friday which I further discussed in my blog of Sunday. Krugman takes issue with my statement that âMr. Obama, in his budget submitted ...
April 26, 2011, 2:35 am, 847216
My colleague Dan Kessler writes in todayâs Wall Street Journal that Obamacare creates large disincentives to work. I've found the following graph useful for showing students why. (The same type of graph is used in of my economics text Chapter 14, p 404.)
April 25, 2011, 2:35 am, 846849
This graph from my Friday Wall Street Journal article simply presented basic facts about the second Obama budget and compared it with the first Obama budget and with the House budget.
April 16, 2011, 12:35 am, 844320
A transparent budget proposalâsuch as the Administrationâs first 2012 Budget presented by President Obama on February 14 or the House Budget presented by Paul Ryan on April 6âcontains year-by-year tables showing the proposed path for government outlays over time. These are needed to estimate the economic impact of a ...
April 15, 2011, 4:35 pm, 844269
The American Economic Association has just chosen my colleague Jon Levin to receive the John Bates Clark Medal awarded each year to the best economist under the age of forty. Congratulations Jon! And a good prediction by Justin Lahart of the Wall Street Journal who wrote this about Jon ...
April 10, 2011, 4:35 am, 842136
The budget agreement that emerged from last weekâs negotiations literally changes the direction of federal spending. As the chart shows the Obama Administrationâs proposed increase in discretionary spending for 2011 has been reversed in the course of the negotiations into an actual decrease in discretionary spending. A year ago ...
April 8, 2011, 2:35 am, 841660
Much has been written on how the House Budget Resolution for 2012 presented on Tuesday by Paul Ryan compares with the Administrationâs Budget for 2012. From a macroeconomic perspective, perhaps the biggest difference is that the House Budget brings outlays as a share of GDP back close to 2007 ...
April 3, 2011, 8:35 pm, 839927
In tomorrowâs Wall Street Journal, Gary Becker, George Shultz and I present the economic case for a credible strategy to reduce the growth of federal government spending, bring the deficit down, and increase economic growth. We emphasize the words credible and strategy.
The essential first step in ...
April 3, 2011, 2:35 am, 839795
Paul Krugman responded to my reply (March 31) to his two critiques (afternoon and evening of March 30) of my post (January 14) on the negative correlation between investment and unemployment. He now says that Taylor âprofesses himself baffled.â Of course I didnât profess ...
April 2, 2011, 4:35 am, 839692
Yesterdayâs meeting of the G20 finance ministers in China broadened the ongoing ârebalancing current accountsâ agenda to consider international monetary policy reform. But few central bank governors came so an important monetary policy issue could not be discussed: the international rebalancing of monetary policy.
The Central Bank ...
March 31, 2011, 10:35 pm, 839234
Like Paul Krugman, Justin Wolfers also wrote yesterday about my blog post of January 14 on the correlation between investment and unemployment. Wolfers argues that the relationship did not exist in earlier years. He is wrong.
His argument is based on the observation that the scatter of points ...
March 31, 2011, 12:35 pm, 839046
Paul Krugman wrote a post yesterday afternoon and another one last evening on a January 14 post of mine. In the Janaury post I pointed out the strong correlation between total fixed investment as a share of GDP and the unemployment rate during the past two ...
March 29, 2011, 4:35 am, 837930
Last Friday in New York, Charles Plosser, President of the Philadelphia Fed, proposed an exit strategy for the Fed. Itâs the first explicit exit strategy to be put forth by a member of the FOMC, so it deserves careful consideration and discussion.
Previous statements about exits by ...
March 27, 2011, 2:35 pm, 837423
Monetary policy rules can be used both for prescriptive and descriptive purposes, but itâs important to be clear about which purpose one has in mind. A policy rule estimated over a period which included the Great Inflation of the 1970s, for example, might be a good description of policy ...
March 26, 2011, 4:35 am, 837252
One of the things I like most about blogging is that I can post from anywhere in the worldâTokyo, Milan, Washingtonânot just from my home or office at Stanford.
Well not exactly. This past week I could not post from Beijing where I was ...
Well not exactly. This past week I could not post from Beijing where I was ...
March 25, 2011, 10:35 am, 836992
The data are now clear. Despite its large size, the 2009 U.S. stimulus package failed to increase government infrastructure spending or other government purchases as its promoters had claimed it would. The large federal stimulus grants sent to state and local governments for infrastructure spending were mainly used to reduce ...
March 19, 2011, 4:35 am, 834902
David Wessel writes about the "straitjacket" of a one-size-fits-all monetary policy in his Wall Street Journal column this week. He shows why a single interest rate set by the European Central Bank is not necessarily appropriate for all the countries in the Euro zone: it can push some countries ...
March 17, 2011, 2:34 pm, 834241
Todayâs TARP hearing at Senate Banking follows a slew of recent reports. The Congressional Oversight Panel (COP) issued its final report yesterday. Economists Simon Johnson, Allan Meltzer, Joe Stiglitz, and Luigi Zinglales submitted testimony to COP two weeks ago. The Special Inspector General ...
March 12, 2011, 8:34 pm, 832161
Last week the Senate voted down the House proposal (HR1) to slow the growth of spending in the current fiscal year 2011. Now alternative plans are being laid to slow the growth of spending in 2011 by roughly the same amount as HR1, possibly through a series of shorter continuing ...
March 5, 2011, 10:34 pm, 829580
In âActivism,â a paper soon to be published by the Council on Foreign Relations, Alan Greenspan delves into the consequences of the recent surge of what he describes as âgovernment activism, as represented by the 2009 US$814 billion programme of fiscal stimulus, housing and motor vehicle subsidies and innumerable ...
March 2, 2011, 10:35 am, 828323
At yesterday's hearing before the Senate Banking Committee, Fed Chairman Ben Bernanke talked about monetary policy rules in response to a series of questions by Senator Pat Toomey. First, the Chairman stated that the Taylor Rule calls for interest rates âway below zeroâ and that this justifies methods such as ...
February 28, 2011, 12:34 pm, 827442
Some claim that House budget proposal H.R. 1 to reduce the growth of federal government spending will cause a slowdown in the economy and even increase unemployment. Consider, for example, a recent report by Alec Phillips of Goldman Sachs which claims that the House proposal would reduce economic growth ...
February 19, 2011, 8:34 pm, 824748
If history is any guide, we are about to hear scores of scare stories about the harm caused by the spending reductions in the 2011 budget resolution (H.R.1) passed by the House early this morning. Maybe youâve already heard how the budget threatens the âdaily operations of National Weather Service.â ...
February 16, 2011, 4:34 pm, 823603
Two years ago this week the 2009 stimulus package was enacted into law, and, to examine its effects, the House Committee on OversightâSubcommittee on Regulatory Affairs held a hearing chaired by Jim Jordan of Ohio and ranking Member Dennis Kucinich also of Ohio. The first panel of witnesses consisted ...
February 10, 2011, 2:35 pm, 821239
The goal of the new House leadership is to reverse the spending binge of the past three years. They have already laid out the first step: the House Appropriations Committee has agreed to spending levels for nondefense discretionary spending for fiscal year 2011. However, because the previous Congress did not ...
February 5, 2011, 6:34 am, 819200
The Atlanta Fed, through its âmacroblog,â has joined the discussion about reform of the Federal Reserve. Itâs a good discussion to have. David Altig, Senior Vice President of the Federal Reserve Bank of Atlanta and main blogger, wrote the latest entry on my Wall Street Journal article of ...
February 3, 2011, 4:34 am, 818287
Following the financial crisis, it is understandable that central bankers want better advice from economists and their economic theories, as Mojmir Hampl of the Czech central bank writes this week in the European Opinion section of the Wall Street Journal. But Princeton economist and recent president of the American ...
February 1, 2011, 4:35 pm, 817654
Last Friday I spoke at a conference at the Reagan Presidential library where over 50 currently serving members of Congress--including many new members--met to discuss the future. One of the big issues was the debt limit, which has already been the subject of partisan discussion and is now viewed as ...
January 31, 2011, 12:34 pm, 817062
The Wall Street Journalâs choice of a headline for my op-ed last Friday âA Two-Track Plan to Restore Growth,â was a great way to pair the proposed fiscal reform with the proposed monetary reform. The Congress and the President would lay out the fiscal track to reduce the exploding ...
January 19, 2011, 4:34 pm, 812660
The phrase in the headline above concludes Amity Shlaes's "amazingly thorough" article (quoting AEA President Orley Ashenfelter here) on the long cyclical swings between rules and discretion which I documented in a speech at the annual AEA-AFA luncheon in Denver on January 7. Given that the previous period ...
January 14, 2011, 2:35 pm, 809735
Some economists argue that the efforts now underway to reduce government spending as a share of GDP will have adverse effects on unemployment. This is not what the data show. Consider this chart which shows the pattern of government purchases as a share of GDP and the unemployment rate over ...
January 8, 2011, 4:35 am, 807418
Each year since 1948 the American Economic Association and the American Finance Association hold a joint luncheon with an invited speaker. Over the years the luncheon has grown to a very large affair usually held in the big hotel ballrooms. This yearâs luncheon was held today in Denver, and ...