Why the US government can’t be downsized

September 12th, 2017

Speaking at an event organized by Robert Greenstein, the President of the Center for Budget and Policy Priorities, I argued last week that unless our values have changed profoundly in an antigovernment direction, the balance of pressures from economic change will lead to an expansion of the federal budget relative to GDP. This was also the conclusion of a paper released by Paul Van de Water of the Center. Excellent summaries were provided by Al Hunt and David Leonhardt.


Stan Fischer’s departure from the Fed: End of an era

September 7th, 2017

Stan Fischer announced yesterday that he is leaving his position as Vice Chair of the Fed.  The Fed and the international monetary system will be weaker for his departure from official responsibility.  It is the end of an era.

Stan’s has been a singular career.  As an MIT professor he coauthored, with his close friend Rudi Dornbusch, the macro textbook that defined the basics of the field for a generation.  With Olivier Blanchard, he wrote the treatise that defined the state of the art for graduate students.  His lectures were models of lucid exposition and balanced judgement.  My view of monetary economics was shaped by my experience auditing his class in the Fall of 1978. Legions of central banking greats, starting with Ben Bernanke and Mario Draghi, were not just his students but his disciples. READ MORE