Financial markets have become increasingly dependent on the Federal Reserve. The Fed is dependent on data (just in case you didn’t know). The data for the next few months will be distorted by the federal government shutdown during the first half of October. So what’s a responsible policy maker or investor to do to get a handle on how the U.S. economy is faring?
Erskine Bowles and Alan Simpson, the deficit-reduction duo, are trying to rekindle congressional interest in a $2.5 trillion package of spending cuts and tax increases with new details showing how it could work.
Helene Rey made a side trip on her way to the hospital to give birth to her daughter in September 2006: She stopped off at the main office of London Business School, where she teaches economics, to turn in a report on a doctoral defense.
Cleaning up after the housing bubble burst seven years ago turned out to be a lot harder than the Federal Reserve imagined. And for a while, it seemed as if the cost of risk-taking run amok was enough to put the fear of God in central bankers.
In their important new book, “The Bankers’ New Clothes,” Anat Admati and Martin Hellwig challenge a cherished belief of people who run big banks: Equity is “expensive” and requiring banks to fund themselves with more equity (relative to their debts) will somehow slow the economy.
Inflation is sometimes referred to as a hidden tax. Unlike other taxes, it doesn’t require legislation by Congress or the states. It doesn’t merit a line item on the 1040 federal income-tax form many Americans will file this week. And it doesn’t appear on the bottom of sales’ receipts as a percentage markup on the things we buy.