The Fed Battles Deflation and Class Warfare

The Fed's balance sheet expansion is the only game in town when it comes to avoiding a total financial meltdown.

Inflation Is Better Than Deflation

As the global financial and economic crisis has grown increasingly dire, market participants and policymakers alike have looked to three past crisis models.

The Crisis and Fix Cycle

The global financial and economic crisis that emerged in August 2007 has entered a dismaying fourth phase.

The Fed Makes History

The Fed has made history by actively initiating a battle against deflation through quantitative easing.

Print Money and Cut the Payroll Tax

A deflationary spiral must be avoided at all costs since such a development would virtually ensure a global depression.

More Panic

The accelerating adverse feedback loop must be broken before further wealth destruction and more intense economic contraction usher in a global depression as devastating as the one in the 1930s.

Panic

There is a simple solution to the housing-bubble problem that lies behind the current panic: an institution that makes a mortgage loan should be required to keep that loan on its balance sheet.

Risk and Systemic Risk

The ultimate lesson from the collapse of the housing bubble and the attendant credit crisis is that financial and economic cycles will always be with us.

Tipping Point

As concerns about the economy grow, wecan expecta continued, rapid drop in home prices, the emergence of more troubled financial intermediaries, and continued "rescue packages."

The Fed's Dilemma

The Fed is in a bind, pulled toward easier monetary policy by a weak economy and fragile credit markets, while simultaneously needing to resist higher inflation.

America's Economic Outlook: A Symposium

Will the U.S. economy improve or worsen between now and Election Day in November?

False Dawn

The bursting of the U.S. housing bubble has beenfollowed by suggestions that the worst is over, but the underlying problem has grown worse.

Wealth Enhancement and Storage

While tax rebate checks may boost growth slightly, the persistent drag from wealth losses will undercut the Fed's forecast for a sustainable growth rebound.

The Inflation Solution to the Housing Mess

The Fed should use reflation to stabalize the housing market.

Denial, Hope, and Panic

The pattern of market panic and reaction by the Fed to save the day has been repeated over and over again and with rapidly increasing frequency since last August.

Japan's Lost Decade

Japan's experience in the 1990s is a compelling reminder that the worst approach to dealing with the unusual set of problems we currently face would be to deny that they exist.

The Risk Cycle

Comingafter a sudden deterioration of household finances tied to the fallout from falling home prices and stocks, the stimulus package will not avert the recession that is already underway.

Fine in 2009 (Not So Great in 2008)

The prospects for the U.S. economy in 2008 are not good, but there is hope for 2009.

Why Do Financial Firms Take Too Much Risk?

As a matter of policy, central banks should not relieve financial firms of the consequences of the firms' risky behavior.

One Fix Too Many

The subprime superfund will inappropriately reward financial players who undervalued risk and got burned.

Global Rebalancing

The global economy is rebalancing itself away from U.S. demand growth and toward global demand growth.

Recession 2008?

Is a recession in the cards for the upcoming year?

The Music Stops

What happens to global financial markets when liquidity dries up?

The Band Plays On

Behind the troubling rise of uncertainty about the mortgage derivative market lies a complex, unfolding story of the relationship between the real economy and the financial sector.

Why Interest Rates Are Rising

What is the cause of the abrupt rise in interest rates?

The Remarkable American Consumer

American consumers' spending tendencies have managed to keep GDP in positive territory.

Weaker Capital Spending Cuts Growth Forecast

How is capital spending affecting the economy?

Monetary Mischief

How are differences in inflation affecting the Federal Reserve and the Bank of Japan?

China's Risky Currency Policy

Testimony on therole of currency in the U.S.-China relationship.

Recession in 2007?

Will there be a recession in 2007?

Risk and Return in Subprime Mortgages

Now that the worst of the housing slowdown is over, potential homeowners have something new to worry about: the subprime mortgage market.

The Lhasa Frontier

A new railway, connecting Beijing to Lhasa, is opening Tibet to commerce and tourism.

The Economy, Profits, and Stocks

What should we expect from stock profits and interest rates before the end of 2007?

The Wealth of Modern Nations

The United States and China both seek to preserve their own wealth, but each country has much to teach the other.

Housing and American Recessions

No one ever said that avoiding recession after a housing bubble would be easy.

U.S. Slowdown

How will the Fed's Open Market Committee respond to persistent inflation in 2007?

A Case for Inflation Targets in the United States and Japan

The central banks of the world’s two largest economies--the United States andJapan--are both worried but hopeful about inflation.

Soft Landing or Stagflation?

The Fed's recent decision to raise the federal funds rate may have unintended consequences.

America's External Balances

Despite predictions, both the broad trade-weighted dollar and the dollar exchange rate against other major currencies such as the yen and the euro have been remarkably stable.

Greenspan's Inflation Is Bernanke's Problem

Markets should understand that the Fed will be unwavering in its determination to bring inflation back into the 1 to 2 percent target range.

Fed Uncertainty Means Market Uncertainty

Is Ben Bernanke making a mistake by being honest with financial markets?

Hedge Funds: Origins and Evolution

What is so special about hedge funds? How do they relate to mutual funds?

China Needs to Float the Yuan--for China's Sake

The Chinese and the leaders of other major nations of the world economy cannot continue to complain about global imbalances while resisting exchange rate adjustments.

What Is Tight Money?

The time has come for a tighter monetary policy, and central banks in the United States, Europe, and Japan have all begun to apply it.

Japan Gingerly Exits Deflation

The Bank of Japan must exit quantitative easing and normalize monetary policy with a return to modest positive interest rates.

Bond Market Bubble?

The asset bubble has spread to long-term government bonds, especially those with inflation protection.

The Fed: Pulling on a Rubber Band

Will consumers continue to use easier access to credit tied to wealth increases so that spending rebounds early in 2006 and poses an inflation threat that forces the Fed to tighten further?

Why the Dollar Is Rising . . . Again

While the dollar’s value will continue to fluctuate in global currency markets, the factors underscoring its long-run attractiveness will probably remain.

Japan Moves toward Sustainable Recovery

Japanese prime minister Junichiro Koizumi’s postal service privatization drive will play a significant role in sustaining a higher level of economic performance for Japan’s economy.

Can Disasters Be Good for Growth?

Tragedies can present opportunities to improve growth and future prospects, but rebuilding without enhanced flood protection in the wake of Hurricane Katrina would be unwise.

America's Resilient Consumers

American consumers continue to make purchases despite recent interest rate boosts and ongoing high energy prices.

The Energy in Real Estate

The Federal Reserveneeds to keep moving cautiously on tightening over the year because the housing slowdown will probably arrive suddenly as speculative sentiment dies.

Can the Fed Achieve a Goldilocks Tightening?

If the Federal Reserve continues to raise interest rates, it could weaken both the U.S. housing boom and the global economy.

Europe's Struggling Currency Union

We willprobably witness a major turnover among European leadership; younger, more pragmatic leaders will see that, ultimately, Europe’s monetary arrangements need to change.

What Markets Are Saying

Two underlying drags are hindering the economy: the rise in energy prices over the past year and the resulting upward pressure on inflation.

The Difficult Search for "Neutrality"

The Federal Reserve's measured move toward a "neutral" federal funds rate, the short-term rate that keeps the economy growing at about 3.5 percent, is a tricky process.

Greenspan's Second Bubble

The Federal Reserve should proactively move to end the housing bubble to aovid even more disruption of financial markets should the bubble burst on its own.

Should Americans Save More?

Saving is a good thing, but it is possible to overdo it.

Slower Growth

The United States may press for further currency realignment, meaning, in effect, a weaker dollar, at the upcoming G7 meeting.

What Determines Interest Rates?

Pundits who have predicted higher U.S. interest rates due to budget and current account deficits are wrong.

Time for More Currency Flexibility

Asian countries are actively supporting the dollar in order to avoid the deflationary pressure that would come with an appreciation of their currencies against it.

For a Few Dollars More

Another year of dollar pegging will mean a U.S. current account deficit of over $700 billion and a negative U.S. saving rate.

Listen to the Markets

Markets are flashing warning signs as interest rates and the stock market grind lower and the dollar has slipped to a six-month low.

End the Rate Increases

With U.S.inflation and growth both falling, there is no inflation risk attached to a pause in Federal Reserverate increases.

The Recovery

The U.S. economy faces a challenging year as it adjusts to the withdrawal of substantial stimulus (both monetary and fiscal), to higher oil prices, and to higher short-term interest rates.

Oil and Stagflation

Cushioning the pain of higher oil prices by cutting oil taxes or drawing on the Strategic Petroleum Reserves would only prolong the period of adjustment to higher oil prices.

Normalization Means Higher Inflation

The coming year will see the Federal Reserve decide whether to target price stability or try to sustain growth and financial markets.

Japan Rising

With the goods newson Japan's economycomes one problem: the interest rate on Japan's government bonds--of which there is ample supply--is rising rapidly.

China

China's creaky financial system seems destined for an economic hard landing this year.

Paradise Lost

The U.S. economymay be nearing the end of a benign, unusual period of faster growth and lower inflation and moving into a period of slower growth and higher inflation.

America Demands; China Supplies

Exacerbation of excess supply in the world economy as U.S. demand growth slows would be reflected in market prices.

Sumo Economics

Japan's intensifying deflation could be relieved by replacing its surge in dollar buying with more printing of money employed to buy back its own interest-bearing government debt with cash.

Watch Growth, Not Exchange Rates

The attention being paid to exchange rates and to utterances about them by finance ministers and central bankers is misplaced.

The Opposite of Stagflation

The current economic cycle is fundamentally benign, but if policymakers fail to recognize it as such and ignore falling prices because output growth is strong, a global recession could occur.

As Good as It Gets

As we move into 2004, 2003 may really start to look like it was as good as it gets.

Animal Spirits and Policy Stimulants

The policy stimulants administered in very large doses to the U.S. economy at midyear are wearing off fast.

The World Economy after Dubai

A move toward global reflation to absorb excess capacity would be a positive-sum game.

A Sustainable U.S. Recovery?

U.S. demand growth is accelerating to a level that will probably produce a third-quarter annualized GDP growth rate above 5 percent.

Is Japan Recovering?

The Japanese economy and the Japanese stock market are, by some measures, flashing recovery signals even more strongly than their American counterparts.

The Fed Abandons Bold Reflationary Measures

A strengthening dollar aided by continued dollar purchasing by Asian central banks represents another headwind for the U.S. economy to overcome.

Threefold Stimulus Means Strong Growth

By emphasizing deflation avoidance, the Federal Reserveoffers an assurance to markets that short-term rates will remain low--or lower--for some time.

The Weaker Dollar Is Good News

U.S. policymakers are breaking new ground with important reflationary measures to move the economy onto a path of sustainable recovery.

Don't Fear a Weaker Dollar

In the short run, tax cuts at the federal level will be necessary to offset sharp tax increases at the state and local level.

Time to Target Inflation

By the end of this year we shall see the Fed targeting higher inflation after having been unable to avoid a U.S. double-dip recession that precipitates a global recession.

Ill Winds

The damage of prolonged exogenous forces is already great enough to justify a rapid move to additional stimulus on both the monetary and fiscal fronts, both in the United States and abroad.

The President's Economic Growth Proposal to Eliminate the Double Taxation of Corporate Earnings

Elimination of the double taxation of dividends would be an excellent start down the road to full elimination of the tax on corporate income and a movement toward an integrated tax system where corporate income is imputed to its ultimate owners—households—and taxed once at that level at the same rate that all income is taxed.

Greenspan Is Wrong

Stimulative tax rate cuts are needed now.

More Tax Cuts, Please

Tax cuts should be larger, not smaller, in view of the weakening economy.

Gold and Deflation

The rise in the price of gold serves as a sign that many investors perceive that reflation efforts have not been successful and will have to be intensified.

Time to Print Money

Fears of deflation and lower growth in the United States are becoming more intense.

Don't Count Too Much on Central Banks

The notion that a central bank can mitigate the pain of business cycles and avoid depressions, an article of faith especially during the "Greenspan" era, is both untrue and counterproductive.

The Fed Didn't Cause the Stock Market Bubble

The Fed's role in creating preconditions for a stock market bubble was, at most, peripheral and that the Fed did undertake to cool an overheating economy in 1999.

After Irrational Exuberance

A pervasive idea that has misled American households attempting to preserve and enhance wealth is the notion that stocks always yield better returns than bonds or other assets.

Rational Saturninity

If U.S. spending stalls and a still weaker dollar exports more deflation, how is global recession in a world of excess capacity to be avoided?

Rational Saturninity

The mood of investors is certainly saturnine, that is, gloomy, and, given the behavior of stock prices in past post-bubble periods, it is probably rational for investors to be gloomy.

Irrational Gloom Is in the Cards

Japan's Choices

Japan's policymakers have found a dangerous way to avoid confronting the nation's decade-old financial and economic crisis.

What's in Store for the Dollar?

The U.S. economy may need a weaker dollar to drive a sustainable recovery.

Charting the Dollar's Course

Last week, for the first time in more than a decade, a U.S. Treasury secretary was forced to testify on exchange-rate policy before the Senate.

Has the Recession Started Yet?

Since 2000 we have seen a sharp drop in investment spending, but no persistent slowdown in consumption.

A Fiscal Boost Ends the Recession for Now

Now we have economic recovery instead of recession.

Keynes Meets Reagan

Economic change for the better has todo with a powerful boost from extra government spending, an idea Keynes pioneered, and from tax rate cuts, an idea pioneered by Ronald Reagan.

America's Bad News/Good News Syndrome

The policy tuners at the helm of the American economy have become so adept at managing systemic risk that the last two potential disasters to hit the economy have been turned into triumphs.

The U.S. Economy Still Needs Tax Cuts

The idea that tax increases are good for the economy is to sound economic principles what bloodletting and leeches are to sound medicine--a dangerous and discredited notion.

Japan in Depression

During 2001, Japan passed from a prolonged and serious recession into outright depression.

The Deflation Monster Still Lives

Help needed to overcome the depressing effects on demand arising from an intensifying synchronous global recession and elevated uncertainty created by terrorist attacks.

Don't Count on a V-shaped Recovery

Probable outcome will be a sharp market sell-off either later this year or early next year as earnings disappointments and lower growth exceed the most negative of current forecasts.

Uncertainty

The first order of business is to reduce the uncertainty and fear that follow naturally from the horrifying images of September 11 and its aftermath.

Is the Productivity Miracle Over?

U.S. productivity growth and job creation still provide ample room for U.S. growth rates above those of most industrial nations.

Forget the Second-Half Recovery

It is time for economists to quit touting a second-half recovery.

Keep the Dollar Strong

The second-half economic recovery touted by analysts and forecasters is a myth; the second half is here and the only things falling are interest rates.

Is the Fed "Trigger Happy?"

Fed could use help from foreign central banks, which might benefitask why their currencies keep falling against the dollar while they look upon the U.S. central bank as "trigger happy."

Japan Needs a Current Account Deficit

If Japan combines a reflationary monetary policy,rapid deregulation, restructuring of its domestic sector and an attendant surge of investment will promote the flow of capital.

Why the Dollar Is Strong

Let us hope that picture changes rapidly if the U.S. consumer, exhausted by losses in the stock market, rising debt, and a sharp rise in tax burdens, decides to stop spending.

Recession or Depression?

There have been two instances in the past century in which a stock market collapse followed an investment-led boom and both times, depression resulted.

A Primer on Depressions

Monetary policy is complacent in view of the dangers facing the U.S. economy, but deductions in interest rates cannot eliminate the recession, they can cushion it.

Recession Denial Will Prolong the Downturn

We must confront nonchalance on the part of banks, starting with Japan, moving on to Europe, and finally to a bout of market-driven complacency in the U.S.

Japan's Lost Decade

Federal Reserve must take care not to cling too hard to a fear of inflation.

America's Harder Hard Landing

The tax rate cuts that President-elect Bush proposed during the campaign are going to become more and more popular as the economy weakens.

The Wealth Effect Faces Hard Times

The most important question about the outlook for the U.S. and global economies is this: If the U.S. stock market ends the year at or below current levels, what would that imply for investment and consumption behavior next year?

The "Double or Nothing" Market

The possibility of a profits recession leading to an economic recession creates a "double or nothing" situation for equity investors.

Bubble Trouble

The U.S. stock market bubble is bursting--starting with the Internet bubble and continuing with the information technology communicationssector bubble.

Oil

If oil pricesstay at $35 a barrel, the picture for global growth and markets gets ugly.

Nothing Wrong with America's Deficit

Aclose look at the reasons behind the current global configuration of trade and capital flows suggests that the frightening combination of a drop in the flow of investments into the US and an attendant sharp drop in the dollar is unlikely to happen.

The Mythical Benefits of Debt Reduction

There is no theoretical or empirical support for the enduring notion that either lower budget deficits or surpluses that lead to government debt reduction are beneficial to the economy.

Saving Money For the Future--and Paying for it

More spending will increase employment and output and thereby will help to arrest the accelerating deflation in Japan.

America's Dangerous "Slowdown"

The important thing to remember about this year’s slowdown and the likely pickup during the second half of the year is that existing inflation pressures will intensify, in contrast to previous years.

Japan Battles the Paradox of Thrift

The key to understanding the fundamental problem facing the Japanese economy can be found in the Keynesian notion of the paradox of thrift.

The Need to Fear a Hard Landing

While financial markets are pricing a soft landing for the U.S. economy, the economic data appearing this spring contain the seeds of a hard landing.

America's Destabilizing Wealth Explosion

Like most “too much, too soon” events, the wealth explosion, while exhilarating, has upset the balance of the economy.

Japan

Going forward, a full recovery of the Japanese economy might be most helped by the political turmoil that would follow the defeat of the economically inept Liberal Democratic Party.

The Fed Struggles To Balance Growth

The policy instruments that the Federal Reserve uses to maintain balanced growth are far better suited to adjusting demand growth than to adjusting supply growth.

The Present U.S. Expansion Outshines The 1960s Expansion

While the future may bring significant volatility in financial markets, the real economic health of the U.S. economy is far better now than at any time in the past century.

How The Bubble Bursts

Everyone expects stocks to keep going up, and so wants to own them until they don’t go up any more; when they don’t go up any more, the bubble bursts.

The Myth of Clintonomics

The main contribution of Clintonomics was to do relatively little harm to the favorable economic environment it inherited.

Can Japan Grow?

Japanese economy could slip back into negative growth and deflation, which would prompt an easing of monetary policy, faster money growth, and inflation targeting.

What Should Central Banks Do?

Fed should keep inflation low by responding to the recent modest uptick in inflation with appropriate modest tightening.

The Treasury's Debt Buyback Proposal

John H. Makin's testimony before the Ways and Means Committe on September 29, 1999.

Interest Rates

If the Fed wants to bring the underlying growth rate down by a percentage point, from around 4 percent to 2.5 to 3 percent, 150 basis points of short-term rate increases will be required.

Causes of the Trade Deficit

Testimonyto the Trade Deficit Review Commission byJohn H. Makin.

Tension Rising

Either markets put interest rates up too high for the stock market to bear, or central banks do.

1999

As bond yields have begun to move higher, the U.S. stock market has taken note and retreat ed about 4 percent from the highs achieved in April.

The Fed Changes Gears

The Fed is returning to its role as a U.S. central bank after nearly two years as the world’s central bank.

Exchange Rate Stability in International Finance

The merits of fixed versus flexible exchange rates and whether the recent shift in U.S. and other official views on exchange rate regimes is appropriate.

Can Japan Have a Golden Age?

In a few years the Japanese economy could be modernized and internationalized to include world-class banks and producers, in both the domestic and the international sectors.

The End of the Golden Age

The dollar peg made borrowing in the local currencies of Asia and Latin America too cheap, and the resulting excess capacity made those currencies overvalued, and the currency pegs collapsed.

The Dangerous Preference for Fixed Exchange Rates

G-7must distinguish between the desirability of seeking price-level stability in a world of excess demand and the dangers of pursuing exchange rate rigidity in a world of excess supply.

What Next?

Financial markets will be disappointed if the current euphoria is predicated on yet another Fed easing in response to anything other than a recession in the United States.

The Deflationary Fear of Inflation

Interesting aspect about central banks is the inverse relationship between the proactive reflationary measures undertaken and the degree of deflation confronting them.

The Fed's Miracle Cure

Based on the market reaction to the Fed’s two easings, America’s Golden Age returned almost instantly,but this time the markets’ sunny projections may be very mistaken.

Japan Must Drive down the Yen to Escape Depression

The West may have to tolerate more imports but that is better than leaving Tokyo to sink.

The Fed Confronts Financial Panic

If everything goes just right--which is improbable--we may see signs of an economic recovery by the dawn of the new millennium.

Interference with Free Markets Causes Global Crisis

The causes of this crisis can be traced to sources distinctly inconsistent with free markets and unfettered global capital flows in both directions.

The Benefits of Devaluation in a Deflationary World

There is a compelling need to learn the difference between the dangers of currency devaluation in an inflationary world and the benefits of currency devaluation in a deflationary world.

Mr. Greenspan's Dilemma

Weak Asian economies preclude a preemptive monetary tightening while U.S. wage pressures preclude a preemptive easing.

Japan Joins the Crisis-a-Week Club

After a lengthy exercise in denial--which only postponed necessary measures to repair the badly damaged banking system--in June 1998 Japan succumbed to the crisis environment in Asia.

What Ends the Party?

The party for the American Golden Age can end in two ways: the economy overheats,or overinvestment puts too much capacity in place and investment and earnings collapse.

Asia's Crisis Is Not a Currency Crisis

Asia’s crisis is a reflection of massive excess capacity and the accompanying deflationary pressure.

Japanese Economy and Banking System

The United States government has offered ample advice to the Japanese government on ways to end its economic and financial crises.

The Case for More Pessimism

The U.S. economy and European economies, for that matter, will probably experience slowing growth as we move further into 1998.

Can Goldilocks Survive?

Can the Federal Reserve maintain the balancing act the economy needs?

Is the Asian Crisis Over?

While it is encouraging that the United States and the IMF are well past the denial phase in Asia, it is too soon to declare that the Asian crisis is over.

The Painful Death of the Japanese Model

Asia's most fundamental problem is the existence of too much productive capacity already in place.

Asian Deflation Threat Grows Ugly

Asia's financial institutions need to learn to operate with less government direction and coddling, not more.

Perils of Prosperity

Time for dollar appreciation to relieve some excess capacity and to slow some of the investment growth that will eventually become excessive in the United States.

Pessimistic Paradigm

Two New Paradigms

If Asian efforts to export deflation through currency depreciation and export promotion are pursued aggressively, protectionist pressure within Asia and the Western Hemisphere will rise.

America Reflates While Asia Deflates

Potential consequences of Asian deflation for financial markets are far greater than a resumption of U.S. growth or a modest increase in interest rates by the German Bundesbank.

America Is a Developing Country

Like most investment-led recoveries, the limits for the expansion of the U.S. economy will probably come with a temporary exhaustion of investment opportunities.

A Single Money for Europe?

If Europe freezes its exchange rates together, European monetary union will not survive for very long without resorting to a highly counterproductive increase in trade protection.

International Exuberance

In a U.S. expansion when pressures on productive capacity and on credit markets to finance continued capacity expansion are high, the implied rise in interest rates will be large.

How High Will the Fed Push U.S. Interest Rates?

Can the Fedengineer yet another soft landing to bring demand growth back into line with sustainable supply growth so that inflation does not accelerate?

Strong Dollar Overpowers Current Account, G-7

With or without the encouragement of Rubin and his G-7 colleagues, the dollar will continue to rise.

America's Amazing Self-regulating Economy

The Federal Reserve now faces the delicate task of reminding investors of that reality without causing them to panic.

Central Bankers and Stock Markets

Central bankers and government officials may be less inclined to speculate about appropriate levels of equity markets, interest rates, or exchange rates.

Japan's Disastrous Keynesian Experiment

Japan has taken the first step toward economic recovery by demonstrating that massive Keynesian public works projects can produce only temporary, faster demand growth.

Weakness in European and Japanese Economies Extends U.S. Expansion

In the second half of 1996, U.S. interest rates are being held down by fortuitous (from the standpoint of the United States) economic slowdowns in Japan and especially in Europe.

How Low Should Inflation Go?

Against the backdrop of global disinflation, widespread hesitancy about the appropriate next step for monetary policy in most countries is unsurprising.

Can America Grow Faster?

John H. Makin analyzes the outlook for long-run growth as well asthe importance of balancing the budget and national saving.

Watching Out for August

August is the month when the world's movers and shakers, in search of a little peace and quiet, hope that nothing big will happen. Of course, for precisely that reason, major events in the political and the financial world often do occur in August.

Is U.S. Economic Performance Too Good to Be True?

Even supply-side, investment-led recoveries eventually come to an end either because of some accident or because of the collective fear of policymakers and investors that the higher equity prices rise, the further they must eventually fall.

Balanced U.S. Growth

The United States may have to get used to a return to the preeminent strength of the U.S. economy in a global economic setting that characterized the Bretton Woods system during the 1960s.

Is the Golden Age Over?

Since February, higher interest rates, higher energy and grain prices, and a stagnant stock market have raised questions about the happy picture of the American economy.

Should We Fear the Fear of Inflation?

The fear of inflation is imparting a deflationary bias to the global economy that could result in a worldwide recession within a year.

Can the Soft Landing Last Forever?

An extended period of moderate growth, neither too fast to excite inflation pressures nor too slow to threaten profits, has supported both the stock and bond markets.

Clouds on the U.S. Economic Horizon?

The outlook for the U.S. economy, hitherto sunny with few clouds, has turned somewhat ambiguous.

Is 1995 Another 1928?

There are similarities and important differences between the behavior of the stock market and underlying economic performance during the 1990s and the 1920s.

The U.S. Economy

During the third quarter the U.S. economy grew at seven times the underlying inflation rate.

Where's the Debt Default?

World Economy Stalls

The U.S. economy always seems to surprise forecasters in the fourth quarter.

The Central Banks' Guns of August

Aside from geopolitical shocks, such as the August 1914 start of World War I and the August 1961 erection of the Berlin Wall, financial shocks have appeared in the middle of August.

Plaza Accord Redux

On August 15 the world's three largest central banks purchased more than $3 billion of an already resurgent dollar and sent its value up by more than 3 percent.

Central Banks Switch to Easy Money Contest

The response by other central banks and by financial markets to the Fed's modest cut of twenty-five basis points to the federal funds rate surprised Greenspan more than anyone else.

Ending the Central Bank's Tight Money Contest

The United States is heading for negative economic growth during the second quarter.

Markets Celebrate U.S. Economic Slowdown

Two useful reminders: growth does not simply continue uninterrupted along a smooth upward path, and inflation will not always remain quiescent.

Is This the Golden Age?

Despite the consternation about the collapse of the dollar against the deutsche mark and the yen, 1995 has so far emerged as a golden age for the U.S. economy and financial markets.

The Fed's New Hemispheric Dollar Standard

Slippage from high yields of 8.0 percent takes us back to levels when the dollar was firm and market players expected the U.S. economy to slow during the second half of 1994.

Soft Landing

Financial markets have spent the first six weeks of 1995 celebrating a "soft landing."

Pray for Slower U.S. Growth

It is clear from events at the end of 1994 that there is too little global saving to go around.

Growth Surprises in 1994

The U.S. economy has had a magnificent year, with growth nearly a third higher and inflation just a bit lower than had been expected last January

Paying for a Propped-Up Dollar

History Lesson

Back to the Future

Take Your Pick, Jobs or Protectionism

Long-Term Economic Implications of the Federal Budget Deficit

Don't Rule Out a Triple Dip

A Cheap Dollar Will Be Costly

Capitalizing on Consumer Caution

Won't Banking Be Splendid when Risk Is Whisked Away

Indexing Remains Best Way To Tax Capital Gains

Saving, Pension Contributions, and the Real Interest Rate

An Unpopular Argument for Higher Saving, More Affordable Housing, and Lower Deficits