At the risk of beating a dead horse, here are some thoughts on the Trump administration’s 3 percent growth forecast. Zero interest rates seemed inconceivable 15 years ago, and yet they happened. Almost no one forecast the productivity boom that took place in the United States between 1995 and 2005 or the magnitude of the […]
The Robots Are Coming, Whether Trump’s Treasury Secretary Admits It Or Not
As I learned (sometimes painfully) during my time at the Treasury Department, words spoken by Treasury secretaries can over time have enormous consequences, and therefore should be carefully considered. In this regard, I am very surprised by two comments made by Secretary Steven Mnuchin in his first public interview last week. In reference to a question […]
Big Risks In The Hasty Rollback Of Financial Regulation
Many business people think it is wonderful that we now have an Administration filled with people from business backgrounds. To a point, I relate. People who have worked primarily in the private sector bring an awareness that others sometimes lack of maintaining business confidence, which as I have often said is the cheapest form of stimulus. […]
The Case For A Proper Program Of Infrastructure Spending
On Monday, I gave a speech at Brookings and then had a discussion with my Harvard colleague Ed Glaeser on aspects of infrastructure investment. Here are the links to the video and transcript. While for reasons described below I believe the Trump campaign proposals are wholly ill-conceived, I remain convinced that an increased and improved programme of public […]
Winning An Election Does Not Entitle One To Upend Basic Values
I will never again use the term “political correctness.” Whatever rhetorical value the term may have once had is far more than offset by what has been unleashed in the name of resistance to it since the US presidential election. I have made no secret over the years of my conviction that the sensitivities of individuals or […]
Investigating ‘Secular Stagnation’
The current low-to-zero growth malaise afflicting the United States and other advanced economies, which appears unresponsive to conventional monetary policy remedies, has been explained as a case of “secular stagnation” by former Treasury Secretary Larry Summers, beginning with an important IMF speech in November 2013. A broad array of work has been inspired by Summers […]
Voters Deserve Responsible Nationalism Not Reflex Globalism
It is clear after the Brexit vote and Donald Trump’s victory in the Republican presidential primaries that voters are revolting against the relatively open economic policies that have been the norm in the US and Britain since the second world war. Populist opposition to international integration is on the rise in much of continental Europe and has always […]
The Economic Consequences Of A Trump Win Would Be Severe
On June 23, the UK will vote on whether to remain in the EU. On November 8, the US will vote on whether to elect Donald Trump as president. These elections have much in common. Both could lead to outcomes that would have seemed inconceivable not long ago. Both pit angry populists against the political […]
Europe Is Right To Kill Off The Criminal’s Favourite Banknote
Most of the time I use this column to recommend policy changes that I believe would make the world a better place. This time I am saluting a policy change I believe will have significant benefits – one that carries with it important lessons. The decision of the European Central Bank last week to stop producing […]
Global Trade Should Be Remade From The Bottom Up
Since the end of the second world war, a broad consensus in support of global economic integration as a force for peace and prosperity has been a pillar of the international order. From global trade agreements to the EU project; from the Bretton Woods institutions to the removal of pervasive capital controls; from expanded foreign direct investment to increased […]
Corporate Profits Are Near Record Highs. Here’s Why That’s A Problem
As the cover story in this week’s The Economist highlights, the rate of profitability in the United States is at a near-record high level, as is the share of corporate revenue going to capital. The stock market is valued very high by historical standards, as measured by Tobin’s q ratio of the market value of the nonfinancial corporations to the value of […]
Trump’s Rise Illustrates How Democratic Processes Can Lose Their Way
While comparisons between Donald Trump and Mussolini or Hitler are overwrought, Trump’s rise does illustrate how democratic processes can lose their way and turn dangerously toxic when there is intense economic frustration and widespread apprehension about the future. This is especially the case when some previously respected leaders scurry to make peace in a new […]
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