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4 months

When Alan Greenspan Worried about Overly Large Budget Surpluses

There was a time, less than 20 years ago, when a major concern for the US government was how it would deal with the problems of paying off all government debt, which was projected to happen by about 2010. Alan Greenspan, then chairman of the Federal Reserve, made it a major point in his "Outlook for the federal budget and implications for fiscal policy" when he testified before the US Senate Budget Committee on January 25, 2001. 

4 months

Steel Tariffs: An Utterly Unsurprising Cost/Benefit Calculation

The Trump administration imposed tariffs on imported steel back in March 2018, using the implausible excuse that it was necessary for national security(for some countries, the tariffs were later changed to import quotas with similar effect). The results are utterly unsurprising: profits for US steel companies have risen and some jobs for US steelworkers have been gained, but at an exorbitant cost for US consumers and for other US workers. Gary Clyde Hufbauer and Euijin Jung lay it out in "Steel Profits Gain, but Steel Users Pay, under Trump’s Protectionism" (December 20, 2018, Peterson Institute for International Economics).

4 months

Macaulay on Economic Progress, 100 Years Before Keynes

Economists have long been fascinated by a 1930 essay written by John Maynard Keynes called "Economic Possibilities for Our Grandchildren" (available various places like here and here). Writing in the opening storms of what would become the Great Depression, Keynes maintained that the main issues facing the economy in the long run was an adjustment to ongoing technological progress. He wrote: "We are suffering, not from the rheumatics of old age, but from the growing-pains of over-rapid changes, from the painfulness of readjustment between one economic period and another." He added: "I would predict that the standard of life in progressive countries one hundred years hence will be between four and eight times as high as it is to-day. There would be nothing surprising in this even in the light of our present knowledge. It would not be foolish to contemplate the possibility of afar greater progress still." 

4 months

Emerging Market Sensitivity to US Monetary Policy – What does the Fed think?

Emerging market currencies have suffered from US interest rate increases. The Dallas Fed proposes reserve/GDP ratio as a simple indicator of stress. If tightening is nearly complete their may be buying opportunities in EM stocks. 

4 months

"You Cannot Convict Your Opponent of Error; You Can Only Convince Him Of It"

Those of us who write about economics can only nod knowingly at a comment from John Maynard Keynes in 1934, in a a fragment of writing that was probably part of a draft of the preface for the General Theory. He wrote:

4 months

Interview with Jesse Shapiro: Media and Political Bias

Renee Haltom interviews Jesse Shapiro on the topic of media bias and political bias in Econ Focus,  published by the Federal Reserve Bank of Richmond (2nd Quarter 2017, pp. 24-29). The entire interview is worth reading, but here are a few points that caught my eye. The headings are my words, and the explanations are Shapiro.

4 months

Interview with Lawrence Katz: Inequality, Mobility, and More

Douglas Clement has a characteristically excellent "Interview with Lawrence Katz" in The Region, from the Federal Reserve Bank of Minneapolis, published September 25, 2017. The subheading reads: "Harvard economist on the gender pay gap, fissuring workplaces and the importance of moving to a good neighborhood early in a child’s life." The interview offers lots to chew on. Here, I'll just pass along some of Katz's thoughts on a couple of points. 

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