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Posts Tagged ‘Summers’

Whither Central Banking?

Posted by hkarner - 26. August 2019

Anna Stansbury

Anna Stansbury is a PhD candidate in Economics at Harvard University.

Lawrence H. Summers, US Secretary of the Treasury (1999-2001) and Director of the US National Economic Council (2009-2010), is a former president of Harvard University, where he is currently University Professor.

In an environment of secular stagnation in the developed economies, central bankers’ ingenuity in loosening monetary policy is exactly what is not needed. What is needed are admissions of impotence, in order to spur efforts by governments to promote demand through fiscal policies and other means.

CAMBRIDGE – The world’s central bankers and the scholars who follow them are having their annual moment of reflection in Jackson Hole, Wyoming. But the theme of this year’s meeting, “Challenges for Monetary Policy,” may encourage an insular – and dangerous – complacency.

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Beyond Secular Stagnation

Posted by hkarner - 7. September 2018

Joseph E. Stiglitz, a Nobel laureate in economics, is University Professor at Columbia University and Chief Economist at the Roosevelt Institute. His most recent book is Globalization and Its Discontents Revisited: Anti-Globalization in the Era of Trump.

There is no reason economists should agree about what is politically possible. What they can and should agree about is what would have happened if their preferred policies had been implemented – and keep those lessons in mind as the next downturn approaches.

NEW YORK – As Larry Summers rightly points out, the term “secular stagnation” became popular as World War II was drawing to a close. Alvin Hansen (and many others) worried that, without the stimulation provided by the war, the economy would return to recession or depression. There was, it seemed, a fundamental malady.

But it didn’t happen. How did Hansen and others get it so wrong? Like some modern-day secular stagnation advocates, there were deep flaws in the underlying micro- and macroeconomic analysis – most importantly, in the analysis of the causes of the Great Depression itself.

As Bruce Greenwald and I (with our co-authors) have argued, high growth in agricultural productivity (combined with high global production) drove down crop prices – in some cases by 75% – in the first three years of the Depression alone. Incomes in the country’s major economic sector plummeted by around half. The crisis in agriculture led to a decrease in demand for urban goods and thus to an economy-wide downturn. Den Rest des Beitrags lesen »

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Klarstellung zur säkularen Stagnation

Posted by hkarner - 5. September 2018

Lawrence H. Summers, US Secretary of the Treasury (1999-2001) and Director of the US National Economic Council (2009-2010), is a former president of Harvard University, where he is currently University Professor.

CAMBRIDGE – Joseph Stiglitz hat kürzlich die Relevanz einer säkularen Stagnation für die amerikanische Wirtschaft in Abrede gestellt und dabei meine Arbeit für die Regierungen der Präsidenten Bill Clinton und Barack Obama angegriffen (ohne meinen Namen zu erwähnen). Ich bin kein neutraler Beobachter, aber nicht zum ersten Mal finde ich, dass Stiglitz‘ wissenschaftlich theoretische Arbeit zwar überaus stark, aber seine politischen Kommentare ebenso schwach sind. 

Stiglitz ruft Konservative wie John Taylor in Erinnerung, wenn er darauf verweist, dass es sich bei der Idee der säkularen Stagnation um eine fatalistische Doktrin handelt, die als Ausrede für eine schlechte Wirtschaftsleistung in den Jahren der Präsidentschaft Obamas herhalten muss. Das ist einfach nicht richtig. Die Theorie der säkularen Stagnation – wie von Alvin Hansen konzipiert und von mir vorgebracht – besagt, dass die Privatwirtschaft im Anschluss an eine starke Kontraktion auf sich allein gestellt womöglich den Weg in Richtung Vollbeschäftigung nicht mehr findet, weswegen politischen Maßnahmen entscheidende Bedeutung zukommt. Ich glaube, das ist auch Stiglitz’ Meinung, weswegen ich seine Angriffe nicht verstehe.  Den Rest des Beitrags lesen »

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Interview with U.S. Economist Larry Summers: „The Very People Who Voted for Trump Will Suffer“

Posted by hkarner - 3. Juli 2018

Date: 02-07-2018
Source: DER SPIEGEL

In an interview, former U.S. Treasury Secretary Larry Summers discusses the escalation of trade tensions between his country, China and Europe and the harm President Trump’s economic policies is likely to do to his own supporters.

Harley Davidson announced this week it would move some production outside of the United States.

DER SPIEGEL: Mr. Summers, United States President Donald Trump has announced the next round of tariffs on Chinese products totaling $200 billion if Beijing retaliates against earlier tariffs imposed by the U.S. Has this become a trade war?

Summers: The semantics are less important than the economic reality. We see a cycle of escalation. The nationalist and protectionist elements on both sides dominate. They demonstrate machismo and damage both economies. From a trade point of view, we are not shooting blanks anymore and nor are we engaging in maneuvers. It is now a conflict with real ammunition.

DER SPIEGEL: But isn’t Trump right? China still protects its markets with massive entry barriers for foreigners. The West has been complaining about this for years.

Summers: The president is certainly not right in the way he is doing it. There is not much in the historical records to suggest that these kinds of bluster and threats will be effective. It is an extraordinarily negative achievement of our economic diplomacy that we have our traditional allies being more sympathetic to China than to us because we are sanctioning them. Den Rest des Beitrags lesen »

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Staaten, die unendlich viel Schulden machen? Warum nicht

Posted by hkarner - 25. Oktober 2017

András Szigetvari, 25. Oktober 2017, 08:00 derstandard.at

Während in Österreich über Nulldefizite diskutiert wird, fordern zwei führende Ökonomen, das Thema Staatsverschuldung „entspannter“ anzugehen

Wien/Washington – Die These klingt revolutionär und provokant zugleich. Was, wenn Staaten sich in Zukunft um die Höhe ihrer Staatsschulden keine Gedanken mehr machen müssten? Was, wenn sich die Verbindlichkeiten eines Landes wie von Zauberhand in Luft auflösen? Dann könnten Regierungen nach Belieben in neue Technologien, Schulen, Spitäler und Infrastruktur investieren, ohne dass der Schuldenturm je zu hoch wird. Was nach einem Fantasiegebilde klingt, ist derzeit eine ernsthaft diskutierte These unter einigen der bekanntesten Ökonomen der Welt. Das Peterson Institute for International Economics (PIIE), ein leicht konservativ orientierter US-Thinktank, hat vor wenigen Tagen zu einer hochkarätig besetzten Konferenz nach Washington geladen. Die Diskussionen drehten sich um die Lehren aus der jüngeren Vergangenheit für die Wirtschaftspolitik.

Zinsen sinken ins bodenlose

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Artificial Intelligence and Artificial Problems

Posted by hkarner - 4. April 2017

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Recession 2017? Things Are Happening That Usually Never Happen Unless A New Recession Is Beginning

Posted by hkarner - 13. Februar 2017

By Michael Snyder, on February 8th, 2017, The Economic Collapse

New Crisis - Public DomainIs the U.S. economy about to get slammed by a major recession?  According to Gallup, U.S. economic confidence has soared to the highest level ever recorded, but meanwhile a whole host of key economic indicators are absolutely screaming that a new recession is beginning.  And if the U.S. economy does officially enter recession territory in 2017, it certainly won’t be a shock, because the truth is that we are well overdue for one.  Donald Trump has inherited quite an economic mess from Barack Obama, and it was probably inevitable that we were headed for a significant economic downturn no matter who won the election.

One of the key indicators to watch is average weekly hours.  When the economy shifts into recession mode, employers tend to start cutting back hours, and that is happening right now.  In fact, as Graham Summers has pointed out, we just witnessed the largest percentage decline in average weekly hours since the recession of 2008… Den Rest des Beitrags lesen »

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Summers: Banken sind nicht sicherer als vor dem Crash

Posted by hkarner - 26. September 2016

Deutsche Wirtschafts Nachrichten  | 

Summers CCEin Arbeitspapier zur Stabilität von Großbanken kommt zu einem ernüchternden Ergebnis. Die Finanzinstitute sind heute keineswegs stabiler als vor der Finanzkrise von 2008. Große Zusammenbrüche sind weiterhin möglich, meint der frühere US-Finanzminister Larry Summers.

Einem Arbeitspapier zufolge hat sich an den beträchtlichen Risiken im Bankensektor seit der Finanzkrise von 2008 trotz zahlreicher neuer Gesetze kaum etwas gebessert, berichtet das Wall Street Journal. Die Autoren des Berichts, die Ökonomin Natasha Sarin von der Harvard University sowie der ehemalige amerikanische Finanzminister Lawrence Summers, hatten die Risiken untersucht, die von den größten US-Banken und ihren Konkurrenten auf der ganzen Welt ausgehen.

„Zu unserer Überraschung mussten wir feststellen, dass die ausgewerteten Daten kaum die These unterstützen, dass die größten Banken signifikant sicherer als vor der Finanzkrise sind. Tatsächlich spricht sogar einiges dafür, dass die Risiken zugenommen haben“, schreiben Sarin und Summers. Den Rest des Beitrags lesen »

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Getting Past Slow Growth

Posted by hkarner - 19. April 2016

Photo of Kemal Derviş

Kemal Derviş

Kemal Derviş, former Minister of Economic Affairs of Turkey and former Administrator for the United Nations Development Program (UNDP), is a vice president of the Brookings Institution.

APR 15, 2016, Project Syndicate

WASHINGTON, DC – Most economists nowadays are pessimistic about the world economy’s growth prospects. The World Bank has, yet again, downgraded its medium-term projections, and economists the world over are warning that we are facing a “new normal” of slower growth. Where there is less consensus – or so it seems – is in accounting for this weakness.

Almost three years ago, former US Treasury Secretary Larry Summers revived Alvin Hansen’s “secular stagnation” hypothesis, emphasizing demand-side constraints. By contrast, in Robert Gordon’s engaging and erudite book The Rise and Fall of American Growth, the focus is on long-term supply-side factors – in particular, the nature of innovation. Thomas Piketty, in his best-selling tome Capital in the Twenty-First Century, describes the rise of inequality that is resulting from low GDP growth. Joseph E. Stiglitz’s book Re-Writing the Rules of the American Economy: An Agenda for Growth and Shared Prosperity blames political choices for both slowing growth and rising inequality. Den Rest des Beitrags lesen »

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Grim Tidings from Larry Summers — And the Data

Posted by hkarner - 13. Oktober 2015

By on October 9, 2015

Larry Summers has a dark view of the global economy. In an opinion piece for the Financial Times, Summers describes the dangers facing the global economy as the highest since 2008 — and he is quite straightforward about the risks he sees ahead:

“The problem of secular stagnation — the inability of the industrial world to grow at satisfactory rates even with very loose monetary policies — is growing worse in the wake of problems in most big emerging markets, starting with China. […] Industrialized economies that are barely running above stall speed can ill-afford a negative global shock. Policymakers badly underestimate the risks of both a return to recession in the west and of a global growth recession. If a recession were to occur, monetary policymakers lack the tools to respond. There is essentially no room left for easing in the industrial world.” Den Rest des Beitrags lesen »

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