8 Items

Blog Post - Views on the Economy and the World

Fiscal Education for the G-7

| May 26, 2016
As the G-7 Leaders gather in Ise-Shima, Japan, on May 26-27, the still fragile global economy is on their minds.  They would like a road map to address stagnant growth. Their approach should be to talk less about currency wars and more about fiscal policy.Fiscal policy vs. monetary policyUnder the conditions that have prevailed in most major countries over the last ten years, we have reason to think that fiscal policy is a more powerful tool for affecting the level of economic activity, as compared to monetary policy.

Blog Post - Views on the Economy and the World

A Pre-Lima Scorecard for Evaluating Who is Doing their Fair Share in Pledged Carbon Cuts

| Nov. 19, 2014
Those worried about the future of the earth’s climate are hoping that this year’s climate change convention in Lima, Peru, December 2014, will yield progress toward specific national commitments, looking ahead to an international agreement at the make-or-break Paris meeting to take place in December 2015.The precedent of the Kyoto Protocol negotiated in 1997 is more discouraging than encouraging. It was an encouraging precedent in that countries were politically able to agree on legally binding quantitative limits to their emissions of Greenhouse Gases, to be achieved with the aid of international trading and other market mechanisms.

Blog Post - Iran Matters

Inside the Nuclear Weapon Free Iran Act of 2013

| Dec. 19, 2013

News broke yesterday that three prominent senators—Menendez (D-NJ), Kirk (R-IL), and Schumer (D-NY)—may introduce legislation this year that would impose new sanctions against Iran with a “deferred trigger.” That is, the new sanctions can be averted only if the Obama administration provides specific and difficult certifications every 30 days including that Iran is implementing the terms of the November 24 Joint Plan of Action and negotiating “in good faith” toward a final deal. Based on an advance copy of the “Nuclear Weapon Free Iran Act of 2013,” I summarize the substance of the draft legislation, including both the new proposed sanctions and the complicated set of presidential certifications and notifications to waive existing sanctions and suspend the additional sanctions.  In a second post, I examine the current legislative state of play and the likely administration objections to the draft legislation.

Blog Post - Iran Matters

Anticipating objections to the Nuclear Weapon Free Iran Act

| Dec. 19, 2013

In the near term, the Obama administration does not yet need to engage Senators Menendez, Kirk, and Schumer on the details of their proposed Nuclear Weapon Free Act of 2013. The upcoming congressional recess and the protection of friendly senators (including Senate Majority Leader Harry Reid and Chairman of the Senate Banking and Finance Committee Tim Johnson) are likely to delay consideration of the bill for the time being. However, congressional support for sanctions legislation against Iran has strong bipartisan support, and pressure for additional legislation is likely to grow if – as seems likely – it becomes apparent in coming months that negotiations between the P5+1 and Iran on a final agreement are not faring well. In the event that the Obama administration is forced to enter into negotiations with Congress on new sanctions legislation, the White House is likely to have several objections to the proposed Senate legislation, especially on the certification requirements to waive or suspend sanctions.

Blog Post - Views on the Economy and the World

Cuba: A Trip Back to 1959

| Nov. 25, 2012
I recently visited Cuba for the first time, to participate in scholarly meetings.  For an American citizen this short voyage requires a leap through hyperspace.   It was my third attempt over ten years to get there.  Obstacles had included both the US government and the Cuban government.This was a trip back in time, to 1959.   For one thing, a majority of the (few) autos on the street in Havana are large American cars from the 1950s.  Most are beautiful.   One hears about the cars, but I had thought the reports must be exaggerated.

Blog Post - Views on the Economy and the World

Will Emerging Markets Fall In 2012

| Jan. 23, 2012
Emerging markets have performed amazingly well over the last seven years. They have outperformed the advanced industrialized countries in terms of economic growth, debt-to-GDP ratios, and countercyclical fiscal policy.  Many now receive better assessments by rating agencies and financial markets than some of the advanced economies.As 2012 begins, however, emerging markets may be due for a correction, triggered by a new wave of “risk off” behavior among investors. Will China experience a hard landing? Will a decline in commodity prices hit Latin America? Will the sovereign-debt woes of the European periphery spread to neighbors such as Turkey in a new “Aegean crisis”?Engorged by large capital inflows, some emerging market countries were in an overheated state a year ago.

Blog Post - Views on the Economy and the World

The US & Europe Could Look South to Re-learn Countercyclical Fiscal Policy

| Oct. 28, 2010
During much of the last decade, U.S. fiscal policy has been procyclical, that is, destabilizing.   We wasted the opportunity of the 2003-07 expansion by running large budget deficits.   As a result, in 2010, Washington now feels constrained by inherited debts to withdraw fiscal stimulus at a time when unemployment is still high.   Fiscal policy in the UK and other European countries has been even more destabilizing over the last decade.  Governments decide to expand when the economy is strong and then contract when it is weak, thereby exacerbating the business cycle.