Search Results for: policy uncertainty
New Research Bolsters Link from Policy Uncertainty to Economy
Some continue to blame the great recession and the weak recovery on some intrinsic failure of the market system, the latest supposed market failure being a so-called “secular stagnation” due to a dearth of investment opportunities and glut of saving. … Continue reading
Posted in Slow Recovery
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Policy Uncertainty Makes Firms Reluctant to Hire: New Evidence
I have been arguing that economic policy–in particular policy unpredictability or uncertainty–has been a factor in the slow recovery. That’s the main theme of the book I edited with Lee Ohanian and Ian Wright. A chapter by Scott Baker, Nick … Continue reading
Posted in Slow Recovery
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More Monetary Policy Uncertainty
The Fed’s announcements yesterday increase monetary policy uncertainty in two fundamental ways. Quantitative Easing on Steroids? First, the new quantitative easing announcement implies a gigantic increase in the size of the Fed’s balance sheet and thus effectively an amplification of the … Continue reading
Posted in Monetary Policy
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Novel Research on Elections, Policymaking, Economic Uncertainty
The Becker Friedman Institute of the University of Chicago and the Hoover Institution of Stanford University teamed up yesterday to put on a Conference on Elections, Policymaking, and Economic Uncertainty. The conference was held at the Hoover Institution Offices in … Continue reading
Is Monetary Policy Sufficiently Restrictive?
The President of the Federal Reserve Bank of St. Louis, James Bullard, posted a very clear analysis of this question, addressing whether the Federal Reserve had raised the federal funds interest rate enough. The title of his analysis is what … Continue reading
Posted in Uncategorized
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Turkey Tantrum Contagion Not Automatic, Rather Policy Dependent
Many have been talking about possible international contagion of the financial crisis in Turkey, and Peter Coy touched on the key issues in yesterday’s Bloomberg piece. Recent economic history and theory offer powerful lessons about contagion. Most important is that … Continue reading
Rules and Strategies in the Fed’s New Monetary Policy Report
The Fed’s Monetary Policy Report released last Friday devotes a lot of space to monetary policy rules. This is the third time in a row that the monetary policy report has included such discussions, the first being in July 2017 … Continue reading
Posted in Monetary Policy
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The Fed’s Inflation Target and Policy Rules
The Brookings Institution held an interesting conference yesterday organized by David Wessel on “Should the Fed Stick with the 2 Percent Inflation Target or Rethink It?” Olivier Blanchard and Larry Summers argued, as they have elsewhere, that the Fed should … Continue reading
Posted in Monetary Policy
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Time Inconsistency Is Only One of Many Reasons to Favor Policy Rules
Advocates of purely discretionary monetary policy frequently list Kydland and Prescott’s time inconsistency argument as the only reason for policy rules, and then they try to shoot that down or say it is outweighed by arguments in favor of discretion. … Continue reading
Posted in Monetary Policy
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A Reawakening of Monetary Policy Research
Last May a group of economists, central bankers, market participants, and financial journalists convened at Stanford’s Hoover Institution “to put forth and discuss a set of policy recommendations that are consistent with and encourage a more rules-based policy for the Federal … Continue reading
Posted in Monetary Policy, Regulatory Policy
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Economics One 