It will be tough to fill the shoes of Stan Fischer as Fed vice-chair. The candidates most actively under consideration by the Administration, to serve as number 2 to Jay Powell (who has just been confirmed as Chair), are Rich Clarida, Larry Lindsey, and John Williams. Clarida and Williams are both excellent economists; either one would be great for this job.
January 19, 2018 — President Trump and the Republicans succeeded last month in passing their big tax cut. It may not have many of the desirable attributes of true tax reform (equity, efficiency, bi-partisanship, revenue-neutrality, or cyclical timing); but it is major legislation, as promised. What about that other major Trump promise, to cut the US trade deficit? The tax cut is virtually certain to raise the budget deficit and in turn to raise – not lower – the current account deficit. Call it the Return of the Infamous Twin Deficits. As when Ronald Reagan cut taxes in 1981-83 or when George W. Bush cut taxes in 2001 and 2003.
January 16, 2018 — There are lots of measures of inequality. If we are interested only in income distribution within the United States, it doesn’t matter much which one we look at: They all show rising inequality, as noted in my preceding blogpost. But when we look at inequality internationally, which measure we look at makes all the difference.