Monetary Policy Strategy Reviews a Disappointment

In my latest column in the Financial Times, I argue that the policy framework reviews under way at the Federal Reserve and now the European Central Bank are the monetary equivalent of swimming upstream: a lot of energy will be expended, but they won’t really get anywhere. To the extent that these reviews continue to focus on tweaking inflation targets as a strategy, they will be largely pointless. I offer up some alternative tools and strategies that might be more useful.

Inequality–Up or Down?

Here’s a link to a segment I did on CNBC Squawk Box–see if you can spot the scowl on my face as the presenter laid out his argument that inequality has decreased under the so-called “Trump economy,” so the Democrat candidates shouldn’t bother focusing on the issue in their campaigns. I hadn’t realized there was general confusion about this…stay tuned for some writing on this topic!

What Will the New Decade in Global Trade Bring?

I was honoured to be the first to contribute to a series of publications and roundtable discussions as part of the Chatham House Global Trade Policy Forum. Given it’s a new year and a new decade, I wrote an outlook for global trade. The markets kicked off January euphoric about a Phase One Deal between the US and China, but with tensions remaining between those two countries and likely escalating between the US and Europe, expect trade uncertainty to continue to drag on global growth.

What’s Ailing the Global Economy?

A depressing consensus prevailed among economists at the recent AEA/ASSA annual meetings: the developed world is stuck with low growth, low inflation and low interest ratesfor years to come. Even worse, there is no consensus on why.

Supply and demand for goods and services are basic economic concepts. But when it comes to interpreting shocks to either in the real world, things get murky. Some economists blame prevailing conditions in the industrialised world on flagging supply, others on weak demand. Here’s my take, and what to do about it, in the Financial Times.

Jobs Day and Women

Jobs day last week revealed continued strong jobs growth and weak wage growth. I broke down the data and what it means for the US economy on Bloomberg Daybreak with an all female panel (that never happens!) here.

For the first time, more than half of the NFP jobs added went to women in December. See my comments on what drove that shift and whether we can expect it to continue with NPR here.

Should central banks get involved in climate change?

At her first press conference today, new ECB President Christine Lagarde said “We will take up climate change…and see where and how we can participate in that particular endeavor.” You can’t be a self-respecting central banker without talking about climate change these days. But is there really a role for central banks to play? There is a clear risk to financial risk stemming from climate change, so supervisors should be engaging with this. But the role for monetary policymakers is murky. See here for my latest in the Financial Times.

Wealth taxes don’t work

The wealth taxes proposed by Senators Warren and Sanders have two primary objectives: one is to increase tax revenues to pay for universal healthcare, climate change initiatives and the elimination of student debt. The other is to reduce inequality: over the past 40 years, the share of the country’s wealth held by the top 0.1 per cent of Americans more than doubled to 20 per cent.

But the history of such taxes shows they come up short on both counts. Read my latest in the Financial Times on why here. For the TV clip version, watch my CNBC interview here.