The Federal Reserve announced today it was lowering its target for the fed funds rate 75 basis points, from its previous value of 4.25% to a new value of 3.5%.
Why One Percent of GDP? Opportunity Cost Illustrated (Part III)
As the decoupling thesis becomes more and more tenuous [1], and the rest of the world exhibits greater evidence of a slowdown [2], [3], [4], leading to predictions of a more persistent and deeper slump in the US than previously anticipated [5], I wonder — where did that presciption of a one percentage point of GDP fiscal stimulus come from?
More Thoughts on Fiscal Stimulus: Business Incentives
What does the literature say about the efficacy of incentives for investment?
The case against fiscal stimulus
Everybody else seemed to hear Bernanke say he was in favor of fiscal stimulus as one approach to our economic problems. But I instead heard him articulate very intelligently the potential pitfalls of the strategy.
More Things I Learned at ASSA: Inflation and Labor Cost Measures
One of the AEA sessions I attended (at least in part — I missed the first paper) was titled (excitingly) “Reconciliation of Seemingly Inconsistent Data Series”.
Will inflation fears restrain the Fed?
I think not, and here’s why.
December retail sales
Disappointing yes, but the financial press is getting a little carried away.
The Implications of a Textbook Analysis of Macro Stabilization via Discretionary Fiscal Policy
From Reuters:
If Bush and Congress are to act at all, they will have to move quickly to have any impact, says Alan Auerbach, an economics professor at the University of California, Berkeley, who has done research on the effects of fiscal stimulus.
“Timing is extremely important,” he says. “Recessions typically last less than a year, so unless you can be pretty quick, it’s not worth doing.”
How low will Ben go?
Was 25, now we have 50. Do I hear 75?
Mortgage securitization
I thought it might be helpful to summarize some of the background on how we got into our present mortgage mess.