I’m dubious, but I will not “pull a Lazear”. Or a Don Luskin for that matter.
Still in Search of Expansionary Fiscal Contraction
The revisions in Euro zone and UK GDP figures have confirmed the lackluster performance in economies where rapid fiscal consolidation has been implemented. In the Euro zone, estimated growth has now been negative for five quarters. And in the UK, revised figures indicate negative growth for 2012Q4. In contrast, the US has exhibited continued, albeit modest, growth.
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.
Eliminating Energy-Related Tax Expenditures
With domestic oil production soaring, and petroleum and coal sector profits rising at a rapid clip, now seems the right time to cut back on tax expenditures related to oil extraction and processing.
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.
What If People Lived Forever . . .
In a New Keynesian DSGE (or a RBC)
Approximate Geographic Impact of the Sequester
From Wells Fargo (using Pew Center data), a graphic depicting exposure to Federal spending, and hence sensitivity to the sequester.
Yen Depreciation and the Scope for Expenditure Switching
With Haruhiko Kuroda ascending to head the Bank of Japan [1], it is likely that monetary policy will remain fairly expansionary. Even without direct intervention in foreign exchange markets, the yen will likely continue to weaken as expectations of inflation rise. What is the likely impact of trade flows?
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.
Multipliers When Last the Zero Lower Bound … Bound
Empirical evidence on Inter-war multipliers