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  • monetary policy

    As Fed Tapers, More Central Bank Independence Needed

    This week finance ministers and central bank officials from around the world will converge on Washington for the spring meetings of the World Bank and the International Monetary Fund. Discussions of monetary policy normalization are leading this year’s expansive schedule. One notable item missing from the agenda is discussion of … More

    9 Things Janet Yellen Tried to Say Carefully as the Dow Plunged

    Janet Yellen appeared to emerge with her confidence intact this afternoon after her first press conference as chairman of the Federal Reserve. However, stock markets dropped sharply when, as head of the nation’s central bank, she said the Fed may begin to raise interest rates “six months” after the final … More

    Sorry, Janet Yellen, We Can’t Spend Our Way to Prosperity

    In spite of aggressive expansionary Federal Reserve policies and several rounds of fiscal stimulus since 2007, the U.S. economy has yet to take off. Nonetheless, some officials are refusing to give up and even explaining to the public exactly how these Keynesian stimulus policies will (eventually) work. In a Time … More

    Lawmakers’ Currency Demands Could Backfire on U.S. Exporters

    A number of U.S. legislators want to give the Obama Administration the power to impose tariffs on imports from countries that manipulate their currencies. Such a policy could boomerang on U.S. exporters if other governments follow suit, since reductions in the value of the dollar in recent years could be … More

    The Fed’s Monetary Policy Matters, Too

    It’s easy to get distracted with news like the guessing game of who will replace Ben Bernanke. But the more important issue is: What is the U.S. doing with its monetary policy and why? What we’ve learned about monetary policy since the Fed was created is surely more important than … More

    Next Fed Chairman: Independence Is Paramount

    Larry Summers withdrew his name from consideration for the next chairmanship of the Federal Reserve. The office currently occupied by Ben Bernanke wields enormous power over short-run economic changes. Poor decisions at the Fed can cause recessions or boost markets briefly. For that reason, the most important feature of the … More

    A Band-Aid for Derivatives Trading

    American regulators yesterday agreed, both internally and with the European Union, on how to deal with the trading of financial derivatives beyond U.S. shores. The EU and U.S. essentially decided to treat each other’s rules as “close enough.” While the decision has some value, it continues to miss the point. … More

    China’s Financial Quandary: Get Used to It

    The finance media are discovering that China has trapped itself with bad monetary policy, joining a long list of countries in this situation. The media should next realize that China faces not a crisis but a long-term problem of untangling the effects of bad decisions made over several years. The … More

    Will the Currency Zombie Eat the Trans-Pacific Partnership?

    Currency manipulation is the issue that never dies. No matter how many times the link between exchange rates and American jobs is shown to be tenuous, the matter rises again like a zombie. In this case, it is Japan that has brought exchange rates back into the spotlight, as the … More

    The Euro Loses a Big Supporter and Gains a New Neo-Con

    Definition of an American neo-conservative: A liberal mugged by reality. The new poster child for the budding European neo-conservative: Oskar Lafontaine? Lafontaine, German history majors will recall, is the Social Democrat and former German finance minister who helped launch the European Monetary Union (EMU). He is also the latest European-style … More