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Mohamed El-Erian: Central Banks Seek an Edge in a Game They Can’t Win
Posted: February 25, 2020 at 05:00 AM (Tuesday)

The old strategies aren’t working as well anymore because the board has changed. Monetary-policy specialists are furiously exploring ways to improve central banks’ effectiveness, particularly should economies fall into a recession — a risk heightened by the coronavirus’s cascading economic stop. The underlying policy motivation is the ...


Willem Buiter: The New Normal Should Be Cashless
Posted: February 25, 2020 at 05:00 AM (Tuesday)

NEW YORK – The central bankers and economic policymakers who doubt that deep negative interest rates would prove effective in the next recession have not given that policy a fair chance. The fact is that in an environment of persistently low inflation and negative nominal interest rates, we need to rethink the effective lower bound entirely. ...


Greg Ip: Fear of Coronavirus, Rather Than Virus Itself, Hits Economies
Posted: February 24, 2020 at 07:18 PM (Monday)

Estimates of the epidemic’s impact on the global economy are largely educated guesses. The body’s immune response to infection is often more painful than the infection itself. The same is true of epidemics and the economy. As with terrorist attacks and financial crises, epidemics generate widespread uncertainty and sometimes panic. ...


Jeffrey Frankel: Will the Coronavirus Trigger a Global Recession?
Posted: February 24, 2020 at 04:02 PM (Monday)

CAMBRIDGE – The COVID-19 outbreak seems to have raised the odds of a global recession dramatically. But even if no downturn materializes in the near term, the outbreak, together with US President Donald Trump's trade policy, may herald the end of the era when steadily rising international trade buttressed global peace and prosperity. At the ...


Allison Schrager: Bernie’s Wrong: Americans Now Less Likely to Work 2 or 3 Jobs
Posted: February 24, 2020 at 10:57 AM (Monday)

The front-runner for the Democratic Presidential nomination, Bernie Sanders argues one reason the economy is “broken” is that “Millions of Americans are forced to work two or three jobs just to survive.” But the number of Americans working more than one job has actually been declining over the years and is only about 5%. Most multiple job ...


Stephen Roach: When China Sneezes
Posted: February 24, 2020 at 10:26 AM (Monday)

NEW HAVEN – The COVID-19 outbreak has hit at a time of much greater economic vulnerability than in 2003, during the SARS outbreak, and China's share of world output has more than doubled since then. With other major economies already struggling, the risk of outright global recession in the first half of 2020 seems like a distinct possibility. ...


Narayana Kocherlakota: The Fed Needs to Cut Rates Now
Posted: February 24, 2020 at 09:00 AM (Monday)

Coronavirus poses a risk to global growth, and a reduction would be a cheap insurance policy. The world economy is facing a material risk in the form of COVID-19, or coronavirus. Of course, it isn't clear how much economic damage the virus will do. But it is clear from the damage being done to China's economy -- and the response of ...


John Tamny: Ignore the Neo-Keynesians, 'Easy Money' and 'Sloppy Loans' Didn't Cause 2008
Posted: February 24, 2020 at 06:30 AM (Monday)

Economic discourse would be a great deal more informative if it were broadly understood that no one borrows money. What they borrow is what money can be exchanged for. Always. That's why readers should always be skeptical when pundits and economists talk of "easy money" or "too much liquidity" care of some government entity like the Fed. ...


Peter Morici: Trump’s phase one trade deal with China could strengthen free trade globally
Posted: February 24, 2020 at 06:00 AM (Monday)

Trump’s phase one trade deal with China could strengthen free trade globally. President Donald Trump’s phase one deal could move the world closer to free trade and ultimately save the World Trade Organization. To academics, free trade is a compelling idea. Virtually every Econ 101 class teaches some variant of David Ricardo’s example of ...


Marcus Ashworth: America’s Bonds Are Caught in a European Tractor Beam
Posted: February 24, 2020 at 05:25 AM (Monday)

Yields on 30-year U.S. debt have fallen to record lows. Coronavirus is a factor, but so are the meager pickings available in Europe and Japan. The yield on a 30-year U.S Treasury bond has finally fallen to a record low of 1.83%, having dropped a staggering 50 basis points this year already. With the coronavirus outbreak forcing people to look ...


Stephen Moore: Trump's critics on economy - so wrong, so often
Posted: February 24, 2020 at 12:47 AM (Monday)

There’s an old saying about baseball and life that no one ever had a 1.000 batting average. It turns out that’s not exactly true. At least when it comes to the Trump economy, anti-Trumpers defied the near-impossible statistical odds and somehow have batted 1.000 on their predictions. They managed to get it wrong every time. A chorus line ...


Robert Samuelson: Trump is hooked on deficits
Posted: February 23, 2020 at 04:33 PM (Sunday)

We are going to have this argument repeatedly between now and Election Day: Who gave us this lengthy economic expansion, which is now in its 11th year and is the longest in American history? Is it President Trump and his economists, who claim that their policies — tax cuts, deregulation, trade agreements — have restored dynamic growth? Or is ...


Review & Outlook: Morgan Stanley’s Middle-Class Bet
Posted: February 21, 2020 at 06:48 PM (Friday)

The bank’s E-Trade bid shows confidence in spreading prosperity. It’s been 11 years since the financial panic, yet liberals are still howling about Wall Street getting richer as folks on Main Street scrape by. Hmmm, then why would Morgan Stanley—one of Wall Street’s leading investment banks—be buying the online brokerage firm E-Trade for its ...


Peter Morici: Donald Trump is the moderate candidate in the 2020 presidential election
Posted: February 21, 2020 at 02:22 PM (Friday)

Washington has a way of capturing presidents more than they conquer its bureaucracy — in current parlance, President Trump has become an alligator more than he has drained the swamp. Whether it’s Bernie Sanders, Elizabeth Warren, Amy Klobuchar, Pete Buttigieg, Michael Bloomberg or Joe Biden, the country will get a choice between a defender of ...


Yanis Varoufakis: Brexit’s Stealthy Rationality
Posted: February 21, 2020 at 09:36 AM (Friday)

ATHENS – The motives and thinking behind Brexit were even less worthy than those behind US President Richard Nixon's move in 1971 to ditch the Bretton Woods system. But, as with the "Nixon shock," there is a singular underlying historical factor that explains Brexit. At pivotal historical moments, rational political ruptures often are ...


Tim Duy: Markets Expect a Rate Cut the Fed May Not Deliver
Posted: February 21, 2020 at 08:00 AM (Friday)

Yes, inflation rates are lower than the central bank desires, but there are ways it can fix that without lowering borrowing costs. The minutes of the Federal Reserve’s monetary policy meeting in January that were released Wednesday show central bankers continue to move closer to explicitly allowing the economy to run hot enough to push ...


Noah Smith: The Key to Bitcoin’s Future: Inflation
Posted: February 21, 2020 at 06:30 AM (Friday)

If the cryptocurrency is going to be used as widely as dollars, its fans must abandon the dream of deflationary digital gold. Bitcoin is back, sort of. The original cryptocurrency hasn’t regained the lofty highs of its bubble peak in late 2017, but it has climbed back up to about $10,000: Predictions that Bitcoin would collapse have not ...


Stephen Moore: Natural gas is crushing wind and solar power
Posted: February 20, 2020 at 11:00 PM (Thursday)

The U.S. Energy Information Administration just announced some spectacular news that should be banner headlines across the country: The price of natural gas has fallen to its lowest winter level in 20 years. EIA data show that natural gas prices fell to $1.77 per million British thermal units (MMBtu). In inflation-adjusted terms, the price of ...


Luciana Borio and Scott Gottlieb: Why Does the U.S. Have So Few Confirmed Coronavirus Cases?
Posted: February 20, 2020 at 06:25 PM (Thursday)

How officials can prepare for a disease that’s likely more widespread than CDC numbers show. A mere 15 cases of the Wuhan coronavirus have been diagnosed in the U.S., according to the Centers for Disease Control and Prevention, and that number hasn’t budged in a week. But the true number of cases is unknown, because the U.S. is testing only ...


Donald Boudreaux: Unlike Oren Cass, F.A. Hayek Knew the Economics of Trade
Posted: February 20, 2020 at 04:20 PM (Thursday)

Quoting F.A. Hayek’s 1960 claim that free markets will bring about a “balance … between exports and imports,” Oren Cass argues that the string of annual U.S. trade deficits over the past 44 years proves that Hayek was wrong – that history has “broken” Hayek’s “promise.” Being a non-economist, Mr. Cass can be forgiven for missing Hayek’s ...


Veronique de Rugy: Bernie Sanders’ Troubling Agenda
Posted: February 20, 2020 at 12:01 AM (Thursday)

Don't believe those who tell you that Sanders is some sort of centrist. As Sen. Bernie Sanders looks more and more like the one who may win the Democratic presidential nomination, some tell us that he isn't the radical leftist others make him out to be. Maybe he's not even a socialist, despite his own claims. In fact, the storyline ...


Mohamed El-Erian: IMF, Argentina Re-Engage in Crucial Test of Resolve
Posted: February 19, 2020 at 10:26 PM (Wednesday)

Both sides must work with private creditors to address a complex debt problem. Concluding a week-long visit to Argentina to collect data and meet economic officials, the International Monetary Fund staff mission issued a statement Wednesday evening notable for what it says and what it doesn’t. It marks the beginning of yet another round of ...


Betsy McCaughey: US wildly dependent on coronavirus-plagued China for basic health-care needs
Posted: February 19, 2020 at 08:22 PM (Wednesday)

Federal health bureaucrats deserve an “F” grade for preparedness. Despite years of warnings about America’s over-dependence on China for medicines, masks and other equipment, these officials failed to remedy the situation. Now these same officials tell us we are facing an “unprecedented public-health threat” from coronavirus, also named ...


Jimmy Lai: China’s Facade of Stability
Posted: February 19, 2020 at 07:00 PM (Wednesday)

Recent stresses have exposed the lack of trust at the core of Beijing’s repressive model. There exists today no vaccine for the coronavirus now engulfing China. That is a challenge for President Xi Jinping as he struggles to contain it. But the spread of the coronavirus has revealed a truth that poses a much greater risk to Mr. Xi: There is ...


Avik Roy: House Democrats' Capitulation on Surprise Billing Proves They'll Never Pass 'Medicare for All'
Posted: February 19, 2020 at 05:53 PM (Wednesday)

On the presidential campaign trail, Democratic candidates are making all sorts of promises about how they’ll use federal power to reduce the cost of health care, either through “Medicare for All” or a “public option.” But this month, in a key House committee vote on surprise medical billing, Democrats showed that they prioritize the views ...


John Barrasso: Climate solutions include free-market innovation, not taxation
Posted: February 19, 2020 at 04:32 PM (Wednesday)

Carbon tax is rejected by voters from France to Washington state. Bipartisan, workable climate solutions exist, and they do not include creating new carbon taxes. Free-market innovation — not government regulation or taxation — is the best way to reduce carbon dioxide emissions.People are globally rejecting carbon taxes as the answer to ...


Robert Samuelson: Who’s afraid of Bernie Sanders?
Posted: February 19, 2020 at 03:01 PM (Wednesday)

The latest Post-ABC News poll, which shows Sen. Bernie Sanders (I-Vt.) with a 16-percentage-point lead over his nearest Democratic rival, former vice president Joe Biden, should settle at least one important question. It refutes the notion that most Democrats are focused single-mindedly on defeating President Trump — and that everything else ...


Fed Minutes, Officials Saw Policy Appropriate 'For A Time' Amid Risks
Posted: February 19, 2020 at 02:17 PM (Wednesday)

Federal Reserve officials viewed their current monetary policy as appropriate "for a time" while they remained on guard against domestic and global risks that could slow the longest U.S. expansion on record, according to Fed minutes released Wednesday. "Participants discussed how maintaining the current policy stance for a time could be helpful ...


Greg Ip: The U.S.’s Next Trade War? As China Clash Cools, Conflict With India Looms
Posted: February 19, 2020 at 12:10 PM (Wednesday)

Indian Prime Minister Modi seeks to emulate Chinese success with increased protection for domestic firms. You may have missed it amid headlines of the U.S. trade war with China, but a low-intensity trade conflict with Asia’s other emerging giant is also smoldering. It began a year ago when the U.S. stripped India of special low-tariff status ...


Allison Schrager: When It Comes to Debt, U.S. Households Are Doing Just Fine
Posted: February 19, 2020 at 11:34 AM (Wednesday)

According to many media accounts American households are overwhelmed with debt. Much ink has been spilled on millennials struggling with student debt and households drowning in medical debt. But it turns out, when it comes to debt, some estimates suggest American households are doing just fine – better, in fact, than they were 10 or even 20 ...


Michael Boskin: Is a Strong Economy Enough to Re-Elect Trump?
Posted: February 19, 2020 at 09:31 AM (Wednesday)

STANFORD – The odds of an economic downturn in the US this year remain low, which means that US President Donald Trump's prospects for re-election in November are strong. But with an approval rating still below 50%, Trump will have to navigate a difficult field of swing states and cross his fingers that the Democrats are hobbled by ...


John Goodman: How Trump Can Reform The Health Care System Without Abolishing Obamacare
Posted: February 19, 2020 at 08:31 AM (Wednesday)

The Trump administration has made radical changes in the health care system by stretching the limits of executive authority – much more so than Barack Obama did. Although these changes have been largely ignored by the mainstream media and even the health care media, they have the potential to transform the health care system without any ...


Conor Sen: Hot Jobs Market Will Ease the Student Loan Crisis
Posted: February 19, 2020 at 07:00 AM (Wednesday)

The evidence suggests that more young people are choosing to work instead of pursuing educations of questionable value. Student loan debt has more than doubled over the past decade and now exceeds $1.5 trillion. If there is one bit of good news, it’s that new data from the Federal Reserve Bank of New York shows that student loan debt has ...


Michael Tanner: Debt and Deficits Will Have Huge Impact on Our Future
Posted: February 19, 2020 at 06:30 AM (Wednesday)

Debt and deficits are not exciting issues, but they’ll have a huge impact on our future. In what was little more than a footnote amid the noise of impeachment and the continuing chaos of the Democratic primaries, late last month the Congressional Budget Office officially announced that for the first time since 2012, our annual budget deficit ...


Caroline Baum: Could Apple be the canary in the coal mine for coronavirus?
Posted: February 19, 2020 at 06:00 AM (Wednesday)

Markets have been too optimistic about how much COVID-19 will hurt U.S. companies and the economy. On Monday, Apple became one of the first U.S. companies to warn that it would miss its current-quarter revenue target as a result of the coronavirus, which has constrained iPhone production and curtailed demand for its products in China. Until ...


Stephen Moore and Adam Michel: A Tax-Cut Idea for Trump
Posted: February 18, 2020 at 07:24 PM (Tuesday)

Creating targeted tax-free investment accounts may be the most effective way to reduce wealth inequality. The White House is expected to announce details of its tax cuts for the Trump second term. One idea on the table is to create tax-free investment accounts for lower- and middle-income families. The plan we’ve suggested to the president ...


Mohamed El-Erian: Adapting to a Fast-Forward World
Posted: February 18, 2020 at 10:45 AM (Tuesday)

LONDON – The world is going through a period of accelerating change, as four secular developments illustrate. Firms and governments must make timely adjustments, not only to their business models and operational approaches, but also to both their tactical and strategic mindsets. Firms and governments must increasingly internalize the possibility ...


Steve Forbes: This May Shock You: The Electoral College Is Essential For Our Politics
Posted: February 18, 2020 at 06:00 AM (Tuesday)

Critics of the much-maligned Electoral College overlook one of its fundamental virtues: tamping down dangerously divisive politics. Advocates of replacing this “18th-century anachronism” with a straight popular vote implicitly assume the current two-party system would remain intact and that the candidate with the most individual votes—instead ...


Jared Bernstein: How can we have a good economy with such a terrible leader?
Posted: February 18, 2020 at 06:00 AM (Tuesday)

Let’s start with two facts. One, the U.S. economy clocks in at $22 trillion, making it among the largest in the world. Two, our federal government is dysfunctional. The second point hardly needs defending. The budget process is essentially dead, replaced by a patchwork of “continuing resolutions.” We’ve never had budget deficits of this ...


Jeanna Smialek: How Millennials Could Make the Fed’s Job Harder
Posted: February 17, 2020 at 07:02 PM (Monday)

WASHINGTON — They love the idea of retiring early. That could diminish Federal Reserve’s firepower. “They say millennials are lazy,” billboards plastered across 15 major cities declared last summer. “Retire early and prove them right.” That sentiment, reflected in ads for the investment manager Prudential, is the stuff of a 30-year-old’s fantasy ...


Mohamed El-Erian: Economists Shouldn’t Rush to Predict Quick Virus Rebound
Posted: February 17, 2020 at 06:00 PM (Monday)

They are embracing a V recovery in a still highly uncertain world. More than three weeks after the shock from the coronavirus outbreak resulted in an across-the-board sell-off in U.S. stocks and other risk assets, several indexes are back at record levels. This sharp V pattern repeats the experience of two other unanticipated shocks in the ...


Nouriel Roubini: The White Swans of 2020
Posted: February 17, 2020 at 05:00 PM (Monday)

NEW YORK – Financial markets remain blissfully in denial of the many predictable global crises that could come to a head this year, particularly in the months before the US presidential election. In addition to the increasingly obvious risks associated with climate change, at least four countries want to destabilize the US from within. In my ...


Peter Morici: Why the Fed's refusal to issue digital dollars threatens national security
Posted: February 17, 2020 at 03:10 PM (Monday)

The Federal Reserve's opposition to digital money. The Federal Reserve and Treasury oppose issuing digital dollars to ordinary citizens. That’s a burden on our economy and threat to national security. Money is whatever people will universally accept. It must be portable and reasonably scarce — something not easily created but still capable ...


Review & Outlook: Japan’s VAT Blunder
Posted: February 17, 2020 at 11:23 AM (Monday)

A consumption-tax increase hits growth as the coronavirus looms. The third time wasn’t the charm for Tokyo’s long-running attempt to increase its consumption tax. Data released Monday show Japan’s economy contracted in the last three months of 2019 as the tax hike hammered growth—as many warned and like the previous two times the tax has ...


Niall Ferguson: After the strongmen
Posted: February 17, 2020 at 11:08 AM (Monday)

It is a truth almost universally acknowledged that strongmen now rule the world. The days are long gone when The Economist fawned over Angela Merkel as the “indispensable European” and the Financial Times hailed her as “the leader of the free world.” In Washington, as the recently honored talk radio star Rush Limbaugh observed, Donald Trump, he ...


Robert Skidelsky: The Monetarist Fantasy Is Over
Posted: February 17, 2020 at 05:18 AM (Monday)

LONDON – UK Prime Minister Boris Johnson, determined to overcome Treasury resistance to his vast spending ambitions, has ousted Chancellor of the Exchequer Sajid Javid. But Johnson's latest coup also is indicative of a global shift from monetary to fiscal policy. The forced resignation of the United Kingdom's Chancellor of the Exchequer, ...


Daniel Moss: Take Coronavirus, Add a Trade War and Raise Taxes
Posted: February 17, 2020 at 12:50 AM (Monday)

Japan is facing a trifecta of challenges with severe economic consequences. At least one could have been avoided. One of the world's most pivotal economies is reeling from a self-induced policy mistake. Japan is now paying the price for last quarter’s consumption-tax hike, just as it begins to wrestle with the impact of the coronavirus. ...


Kevin Williamson: Socialism Once Again the Left's Rallying Cry
Posted: February 16, 2020 at 06:30 AM (Sunday)

‘Socialism!’ the Democrats cry. ‘But don’t take us too seriously!’ For once, conservatives were ahead of the curve. American conservatism functioned as a political mass movement in the postwar era not because of the rhetorical gifts of its chief expositors (William F. Buckley Jr. et al.) nor because of the intellectual prowess of its best and ...


Eswar Prasad: Will the Coronavirus Cause a Recession?
Posted: February 15, 2020 at 10:45 AM (Saturday)

The world’s second-largest economy is coming to a near standstill. The rapid spread of the coronavirus is a tough blow for a world economy that seemed on the cusp of a modest revival. The extent of the damage, of course, depends on how soon and how effectively the outbreak is contained. Whatever the trajectory of the epidemic, this is a moment ...


Review & Outlook: Donald Trump, Mastermind
Posted: February 14, 2020 at 06:40 PM (Friday)

Liberals detect a devious cover-up plot with Bill Barr. A hilarious Saturday Night Live skit from the 1980s had the late Phil Hartman playing Ronald Reagan as an amiable dunce in public but a devious mastermind behind closed doors. That routine came to mind Friday as we read the conspiracy theories on the left about Attorney General William ...