1
This is insane. twitter.com/chigrl/status/…
2
1/8. A point which is often lost in discussions of inflation and central bank policy. Inflation is fundamentally the outcome of the distributional conflict, between firms, workers, and taxpayers. It stops only when the various players are forced to accept the outcome.
3
I feel the use of ``stagflation’’ is wrong. We are not seeing anything like stagnation. What we are seeing instead is very strong growth, fueled by private and public demand, hitting supply constraints, and leading to some sharp price increases. Nothing to do with stagflation.
5
1. If it is confirmed that even 3 doses of Sinovac are ineffective against Omicron, China now has 1.4b non immunized citizens... This has major economic implications for China and for the world.
6
RIP Alberto Alesina, my student, my friend. Passion for life. Passion for work (we often disagreed, but we both learned from each other), creativity, and very hard work. Big loss.
7
日本は特に悪性の「長期停滞」、つまり、国内の民間需要の不足に直面しています。完全雇用を維持するためには、積極的な金融政策と財政政策が必要になります。金融政策に可能なことは全て行いました。そこで、財政政策の役割が求められます。
8
Ben Bernanke is the living economist who has made the biggest contribution to world GDP. Without his actions when the financial crisis came, GDP would have collapsed much more than it did. So, on purely financial grounds, he deserves the prize (and on other grounds as well).
9
I finished the 8th ed of ``Macroeconomics'' before covid came. I have now written a covid chapter. It is largely self contained and may be of interest to teachers, students, and interested observers. Comments and suggestions welcome. bit.ly/2GZB375
10
Don't blame the oil companies for their high profits. It is not price gouging, just how markets work. But there is nothing wrong with taxing those exceptional profits.
11
J'ai peur que les économistes de NUPES aient mal compris la signification de multiplicateurs supérieurs a 1. Comme ils ont tendance à me citer, je me sens oblige de corriger. Deux points tout simples (bien sûr, il y a beaucoup de complications potentielles que j’ignore ici):
12
Who is this guy? He is stealing my show... twitter.com/RobinWigg/stat…
13
I am afraid Mr Schäuble misunderstood me. I objected to the Biden stimulus program not because of the increase in debt but because of the size of the demand push it implies and the risk of overheating and inflation. And I do not worry about inflation in the EU.
14
A fascinating graph, showing the dynamics of the second wave in France.
Things were fine in July, but the 20-29 year olds starting relaxing.
Over time, they contaminated older generations until infection rates were high for all.
How will the reverse movement proceed?
15
A question. Central banks have large research departments. Ministries of finance typically do not even have a research department. (with the result that research on monetary policy is much more developed than research on fiscal (macro) policy). Why?
16
A textbook example of how not to design and not to sell a fiscal expansion. While we were worried about Italy, the UK sneaked in. We are lucky that the UK is not in the euro… Otherwise, we would be facing another euro crisis. ☹
17
The world is de facto at war (against the virus, rather than against each other---this is the good news...) With this in mind: US Federal deficits as a ratio to GDP: 1942: -12%, 1943: -26%, 1944: -21%, 1945: -20%. Let's not be squeamish.
18
RIP Bob Mundell. The Mundell- Fleming model still today perhaps the best thought-organizing model we have in our macro tool kit.
19
Enormously impressed by the webinar by Raj Chetty today
bcf.princeton.edu/event-director…
An amazing combination of how to put big data together, test hypotheses, and draw highly relevant policy conclusions. This is 21st century economic research. I feel old, but excited. Watch it.
20
My two cents on the virus today. Two vital sets of measures.
Keep the flow of infections down so the health system is not overwhelmed. Do whatever it takes.
Prepare fiscal measures, including transfers and backstops to banks. Do whatever it takes.
This is more or less it.
21
Of utmost relevance for covid dynamics. twitter.com/SonyKapoor/sta…
22
1. A year and a half ago, President Macron asked Jean Tirole and me to form an international commission to study future major challenges facing France and think about policies. We decided to focus on three issues, global warming, inequalities, and aging. The report just came out.
23
For the last year, I have been working on a book on fiscal policy under low interest rates. It will be published by MIT Press in 2022. Meanwhile, MIT Press has made the draft available to all on an open source site, …y-under-low-interest-rates.pubpub.org
24
Let me double down and go through some numbers. I agree that too much is better than too little and we should aim for some overheating. The question is how much. Much too much is both possible and harmful. I think this package is too much.
25
On MMT. I shall write a longer piece. But: Yes, fiscal policy can be used to maintain output at potential. No, the deficit, unless very small, cannot be fully financed through non-interest bearing money creation, without leading to high or hyperinflation.
Robert Solow Professor of economics emeritus, MIT
Fred Bergsten Senior Fellow, Peterson Institute for International Economics