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

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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

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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

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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

Posted in Financial Crisis, Fiscal Policy and Reforms, Regulatory Policy, Stimulus Impact | Leave a comment

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

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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

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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

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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

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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

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Monetary Policy During Ben Bernanke’s Time at the Fed

Like many monetary economists, I’ve recently been approached by reporters  and commentators to say a few words about monetary policy during Ben Bernanke’s time at the Fed.  Back in December the Washington Bureau of the Wall Street Journal asked me … Continue reading

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