In “The Age of Magic Money: Can Endless Spending Prevent Economic Calamity?”, Sebastian Mallaby raises a variety of questions about the use of aggressive macroeconomic policy to achieve stable economic growth. He begins his July/August 2020 Foreign Affairs paper with an interesting claim: “Crises can drive change, but sometimes it takes two crises to cement a … More Does Macroeconomic Policy Offer a Free Lunch?
A Review of Kimberly Clausing recent book Open: The Progressive Case for Free Trade, Immigration, and Global Capital In a recent article in Foreign Affairs (November / December 2019), Clausing clearly states why she has chosen to write this book now. It has almost become the new Washington consensus: decades of growing economic openness have … More Making the Global Economy Work for Everyone
America used to be known as the land of free markets. That may have been the case in the past, but for many sectors, it no longer holds true. In The Great Reversal: How America Gave Up On Free Markets, Thomas Philippon makes the case that since 2000, Europe and America have switched places. America … More America: The Land of the Not So Free Markets: A Review of The Great Reversal by Thomas Philippon
It’s time to replace employer sponsored health insurance (ESI) in the United States with a Federally funded payment system that is more efficient, more fair, and more stable. The Covid-19 pandemic driven instability in the US economy and illumination of the inadequacies of our health care system provide a unique policy window (see above figure … More Replace Employer Health Insurance: If Not Now, When?
Few doubt that high and rising prices are a primary cause of both the level and growth of expensive health care in the United States. But policy that only focuses on prices foregoes the opportunity to change the allocation of resources and, thus, the structure of health care delivery needed to improve our health and … More It’s Not Just the Prices, Stupid: Health Care Reform Needs More Than Just Buyer Bargaining Power
This blog posting differs from all my other ones. It describes a recent program that a Lawrence colleague and I organized to fit into Lawrence’s 2 week December term program. The official title: Entrepreneurship in London: From the Mayflower to Brexit. The official photographer for the above photo was Chris Finkler. We had a marvelous … More London: Entrepreneurship and Regeneration
Economists have been asking this question for well over a century (or perhaps since Sweden established the Riksbank in 1668.) The answers have changed over time; however, in the 1990s, economists seemed to have reached a consensus that price stability is the primary objective, if not the sole objective, for central banks. Clearly, the financial … More What Should Central Banks Do? Central Bankers Volcker, Mishkin, Rajan, and King Provide Excellent Guidance.
This piece was originally posted on the Lawrence Economics blog in 2012. This version has been updated in many places; however, the effects discussed in that posting remain a major concern today. Political pressure to not only keep interest rates low but to lower them further seem unstoppable, especially since the eventual economic consequences are not … More Low Interest Rates: The Addictive Policy Drug of Choice
The theory, such as it is, has two primary claims: Countries that print their own currencies need not default on excess debts. Inflation in the end can and must be controlled by raising taxes or cutting spending, sufficiently to soak up such printed money. Based on these claims, MMT advocates conclude that the US need … More Modern Monetary Theory (MMT): Not Modern, Nor Purely Monetary, Nor a Coherent Theory
Recently, I joined the Citizen’s Climate Lobby (CCL) which backs the Energy Innovation and Carbon Dividend Act of 2019. This bipartisan piece of legislation introduces a carbon fee that rises each year. The proceeds are distributed to American households on a lump sum basis, similar to the process used for the Alaska oil dividend program. … More Energy Innovation and Carbon Dividend Act of 2019