Tag Archives: Summers

The End of Zero Interest Rates?

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August 14, 2023 — What a difference a year makes!  In 2021, interest rates were close to zero in the US and the UK,  and slightly negative in the eurozone and Japan.  They were expected to remain low indefinitely.  Remarkably, as recently as January 2022, investors thought that the probability the interest rate would rise above 4.0 % within 5 years was only 12% in the US, 4 % for the euro-zone, and 7 % for the UK [p.45].  Those were short-term nominal interest rates.  Correcting for expected inflation, real interest rates were substantially negative and expected to remain so. read more

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Stan Fischer, the Fed, and Sub-par US Growth

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      Now that Janet Yellen is to be Chair of the US Federal Reserve Board, attention has turned to the candidate to succeed her as Vice Chair.  Stanley Fischer would be the perfect choice.   He has an ideal combination of all the desirable qualities, unique in the literal sense that nobody else has them.  During his academic career, Fischer was one of the most accomplished scholars of monetary economics.  Subsequently he served as Chief Economist of the World Bank, number two at the International Monetary Fund, and most recently Governor of the central bank of Israel.   He was a star performer in each of these positions.   I thought in 2000 he should have been made Managing Director of the IMF.   read more

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The Best, the Brightest, and the Least Arrogant

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Over the last 24 hours, President-Elect Obama has announced five top members of his new economic team.   What do they have in common?   

 

Retreads from the Clinton Administration?    Rubin protégés?   No, not all.                    

  • Scholars from leading universities?     No, not all.                    

  • Friends of mine?    Well, yes, though that is not my point.    As it happens, they have been friends, for 12-to-30 years.    (god forgive me.   There are few greater turnoffs than a columnist who thinks it’s “all about me.”    On the other hand, this isn’t a newspaper column.   It’s just my personal blog.  So what the hell.)    Here is the list:

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