Fiscal Policy
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Adopting a Gold Standard Would Promote Fiscal Discipline
“We could allow for a de facto gold standard at little cost. And this standard would ensure that investors could discipline government for borrowing excessively. If citizens were allowed to save their income in gold-denominated accounts without extra costs of taxation and financial regulation, disciplining their government would be as easy as changing the form…
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The Reluctant Fed
“Fed officials should follow the example set by Ben Bernanke. They should be ‘extremely reluctant’ to engage in facilities like the MSLP, SMCCF, and PMCCF. Such programs are ‘outside the range of [the Fed’s] responsibilities.’ They are fiscal policies that ‘are best resolved by Congress’ since they require ‘balancing political and social priorities.'” ~ Thomas…
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Fiscal Profligacy: A Failure of Congress and the People
Almost everybody likes receiving services from the government. Almost nobody likes paying for them.
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What Should Modern Monetary Theory Learn From Argentina?
Can governments run large fiscal deficits financed with new money without generating significant inflation? The experience of Argentina calls this view into doubt.
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Sovereign Bonds Since The Battle of Waterloo
The history of sovereign debt appears to be a history of default, repudiation, and limited debt enforcement. Why, then, do investors keep going back?
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How Can Governments Borrow at Such Low Rates?
Those who cite low interest rates on government debt miss the point. It is not the price of government borrowing that matters. Rather, it is the opportunity cost of government borrowing to society.
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Why Is Country Risk Rising in Argentina?
Argentina has secured an IMF agreement and announced aggressive policies to reduce its fiscal deficit and inflation rate. But that might not be enough to comfort its creditors.
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Is the Growing Federal Debt a Recipe for Disaster?
With the ratio of debt to GDP exceeding 100 percent, a crisis is not unthinkable.
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Growing Pains
Long-run growth projections have plummeted since the Great Recession. How much blame does fiscal austerity bear for this bleak outlook?
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Policy Trajectory and Investor Expectations
Weaponizing one’s influence over expectations can certainly shake up a political scene. But it also serves to shake markets, the source of material prosperity.
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Shiller on Sovereign GDP-linked Bonds
A sovereign GDP-linked bond pays the bondholder only if certain economic conditions hold.
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Lesson Learned
After nearly a decade of decrying austerity programs, Krugman finally understands the monetary offset.
