Does the Fed Have Ammunition to Fight the Next Recession?
Ben S. Bernanke delivered his Presidential Address to the American Economic Association last weekend on the topic, "The New Tools of Monetary Policy" (January 4, 2020, here's a weblink to watch the lecture, and here's a written-out version of the paper on which the lecture was based). To set the stage, he started the talk with a figure similar to this one showing the "federal funds" interest rate--the key interest rate on which Fed policy focuses.
- 07/01/2020
- 4
William McChesney Martin: Keep the Economists in the Basement
William McChesney Martin chaired the Federal Reserve for 19 years and during the terms of five different presidents, from April 1951 to January 1970. He became chair of the Federal Reserve at the time of the Treasury-Fed Accord of 1951, when the modern Federal Reserve invented itself by declaring that it was no longer going to view its job as keeping interest rates low to facilitate government borrowing--as it had during World War II--but instead was going to focus on how monetary policy affected the economy as a whole. Martin became so synonymous with monetary policy that John F. Kennedy once told an adviser that, before he became president, he could only remember the difference between fiscal and monetary policy by reminding himself that "m" was the first letter of both "monetary" and "Martin." He's the one who publicized the phrase that the job of the Federal Reserve was like a chaperone who needs to take away the punch bowl just when the party is warming up.
- 24/12/2019
- 2
How Big is the Space Economy?
The short answer for an estimate of the size of the space economy is: "Probably around $400 billion."
- 24/12/2019
- 4
The Beginning of the End of Uncertainty for the UK
· The UK election result was a clear mandate for Brexit · A UK/EU free-trade agreement may not be ready by December 2020 · Uncertainty remains but real economic progress can now begin
- 20/12/2019
- 3
With the Rise of Index Funds, Who Watches the Companies?
A standard argument for the social usefulness of the stock market is that shareholders have an incentive to monitor and to scrutinize the companies in which they have invested. When this incentive is combined with requirements for firms to disclose information, to be audited, and to answer questions from shareholders--along with the ultimate power of shareholders to replace top executives--publicly-owned corporations must live an examined life. One can have honest arguments over how well this shareholder monitoring works. But the rise of index funds is a direct challenge to these arguments.
- 19/12/2019
- 1
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