Public Wealth and Private Worth: The Inequality Impact of Deficit Spending

By Karen Petrou

Progressive Democrats have recently touted modern monetary theory – i.e., that deficits don’t matter – to press social-welfare spending.  Similarly dismissive of deficits, the Trump Administration and many Republicans now cotton to giant trickle-down individual tax cuts.  But, deficits do matter not just for fiscal hawks, but also for equality advocates.  A new IMF study takes an unprecedented look at U.S. public wealth since 1946, concluding that lots less public wealth undermines the ability of fiscal policy to alleviate economic downturns.  Continue reading “Public Wealth and Private Worth: The Inequality Impact of Deficit Spending”

Big Tech, Big Macroeconomic Problems

By Karen Petrou

It’s easy enough to miss the macroeconomic and financial-sector impact of giant tech-platform companies in the swirl of concern about privacy, political integrity, concentration, and corporate governance.  However, big tech also has massive macroeconomic impact with far-reaching financial-system implications.  We explored safety-and-soundness implications in here and economic-equality impact in here.  Now comes a sweeping IMF study linking and even attributing structural economic transformation to these same big-tech behemoths.  Although inconclusive in critical respects, it’s worth a careful look. Continue reading “Big Tech, Big Macroeconomic Problems”

The Mysterious Case of the Misfiring Monetary Policy

By Karen Shaw Petrou

When former Fed Chairman Bernanke launched a new approach to U.S. monetary policy earlier this year, he prompted many within and outside the U.S. central bank to call for sweeping change that would solve the “mystery” Janet Yellen says bedevils post-crisis monetary-policy transmission.  Just like the blue carbuncle Sherlock Holmes eventually found inside a large goose, central bankers are searching for a new gemstone within reams of data by which to guide increasingly complex policy-transmission channels.  Continue reading “The Mysterious Case of the Misfiring Monetary Policy”