Central bank independence is considered essential for the effective conduct of monetary policy. But has that independence been compromised
How Fiscal is the Fed?
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Economics
Clarifying America’s Great Inequality Debate
Inequality has become more pronounced in recent decades. It is a function of a dysfunctional economy. Recognition is the first step toward
The Biggest Threats to Global Economic Stability
While the sovereign-debt crisis that is currently unfolding across the developing world may not have the immediate global impact of the 2008-09
Private Jets, Climate and Taxes
In a world beset by inequality, private jets represent the tip of the spear. It is time to do something about it.
The Inflation Challenge in 2024
The latest consumer price data in major advanced economies offer some encouraging news about headline inflation trends; but core inflation
Whither Interest Rates?
Absent recurring aggregate supply and demand shocks, or a global private sector investment boom, lower interest rates are here to stay.
Higher Interest Rates Are Here to Stay
The long-standing economic consensus that interest rates would remain low indefinitely, making debt cost-free, is no longer tenable. Even
Will High Interest Rates Trigger a Debt Disaster?
Big government deficits and rising debt-to-GDP ratios are triggering calls for fiscal austerity. But many fiscal hawks ignore the role that
Is Industrial Policy Like Vitamin C or Penicillin?
Industrial policy is being resurrected worldwide, despite a mixed legacy. Yet the prevalence of market failure suggests that improving economic
The Two-State, Two-Economy Solution
Finding a two-state, economically viable solution amid the ‘archipelago’ that is Palestinian territory will be a major challenge.
Reasons to Give Thanks
Later this week, US families join together for Thanksgiving. Many will return to loved ones with heavy hearts, burdened by the unending news
Rebuilding Trust in Expertise
Supporters of populist parties often resent experts who believe their specialized knowledge entitles them to make major policy decisions.
A Victory Lap for the Transitory Inflation Team
More than two years after economists divided into opposing camps over the nature of the post-pandemic inflation, we now know which side was
Why Mainstream Economics Got Inflation Wrong
Leading economists’ misdiagnosis of inflation in 2021-22 was the latest episode in a long-running series of failures, from not foreseeing
A Teaching Moment
Complexity is common. The better we understand its sources, the better we can address its challenges.
An Industrial Strategy for Europe
Europe may need to follow the US and China in the deployment of an industrial strategy. It has the tools to do so.
Certain Uncertainty in the US Bond Market
As inflation recedes bond yields are apt to fall.
Dogs and Economics
Dogs demonstrably make their owners happier. As a result, dog-owners are likely to be more productive. Doggone it!
The Fed’s Done: What Next?
The Fed’s tightening cycle is done. Now comes the recession, for which Wall Street, Main Street and Pennsylvania Avenue are ill prepared.
Should Fiscal Policy Resemble Private Budgets?
Governments are not like individuals or companies. They have far greater borrowing capacity. But limits exist. It is time to think about them.
Does Anyone Care About Deficits?
In recent months, US bond yields have jumped. Surging government deficits are partly to blame. Will politicians respond?
Data Dependent?
The Fed is a self-described ‘data dependent’ decision-maker. But that’s not all. Its aversion to inflation risk and its abiding reliance
China’s Great Leap Backward
‘President Xi prioritizes political control over growth. He is getting his way, for better or worse’.
How Finance Became the Problem
Over time, finance has evolved from playing a crucial but merely intermediary role in the economy, to becoming the driving force behind most