I have been writing recently ([1], [2]) about my paper Crunch Time: Fiscal Crises and the Role of Monetary Policy, co-authored with David Greenlaw (Managing Director and Chief U.S. Fixed Income Economist for Morgan Stanley), Peter Hooper (Managing Director and Chief Economist for Deutsche Bank Securities Inc.), and Frederic Mishkin (professor at Columbia University and former governor of the Federal Reserve). Our paper has generated some interesting discussion by
Paul Krugman and
Matthew O’Brien, among others, to which I’d like to respond.
Author Archives: James_Hamilton
Does the U.S. risk a fiscal tipping point?
In my previous post
I reviewed the recent experience of a number of countries whose sovereign debt levels became sufficiently high that creditors began to have doubts about the government’s ability to stabilize debt relative to GDP. When this happens, the government starts to face a higher interest rate, which makes debt stabilization all the more difficult. Is there any danger of the same adverse feedback loop starting to matter for the United States?
Fiscal tipping points
At the recent U.S. Monetary Policy Forum I presented the paper Crunch Time: Fiscal Crises and the Role of Monetary Policy, along with co-authors David Greenlaw (Managing Director and Chief U.S. Fixed Income Economist for Morgan Stanley), Peter Hooper (Managing Director and Chief Economist for Deutsche Bank Securities Inc.), and Frederic Mishkin (professor at Columbia University and former governor of the Federal Reserve). One of the goals of our research was to try to understand the events that can lead a country to a tipping point in which it faces rapid increases in the interest rate on its sovereign debt, as a result of which the country finds itself with an unmanageable fiscal burden.
Bernanke on long-term interest rates
On Friday I attended a conference at the Federal Reserve Bank of San Francisco, which included a very interesting presentation by Fed Chairman Ben Bernanke on long-term interest rates.
The Dorian Gray pill
On Friday I attended the U.S. Monetary Policy Forum in New York City. I will be posting some material about the paper I presented at the conference later this week. But today I wanted to mention an interesting talk at the conference by Harvard Professor Greg Mankiw on health care costs.
Minimum wage and unemployment
With the recent proposal to raise the minimum wage, I noticed that California currently has one of the highest minimum wages ($8.00/hour) and one of the highest unemployment rates (9.8%) in the country.
Planned crude oil pipelines
The EIA last week released a nice summary of planned additional U.S. pipeline capacity.
Prices of gasoline and crude oil
Here I comment on some recent developments affecting the prices of WTI, Brent, and gasoline.
Dude, where’s my cheap gas?
Those who have been told that oil production is booming may be wondering why the prices of oil and gasoline are climbing again.
Is this a good time to buy stocks?
With the stock market setting new 5-year highs, I was interested to take another look at some of the long-term fundamentals underlying equity values.