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Ed Dolan

Ed Dolan

Edwin G. Dolan attended Earlham College and Indiana University, where he majored in Russian Studies as an undergraduate and later earned a Masters degree from Indiana University’s Russian and East-European Institute. After earning a doctorate in economics from Yale University, he taught at Dartmouth College, the University of Chicago, George Mason University and Gettysburg College. He taught in Moscow, Russia, where he and his wife founded the American Institute of Business and Economics (AIBEc), an independent, not-for-profit MBA program.

Articles by Ed Dolan

What Is the Nairu and Why Does it Matter?

December 19, 2016

Author: Ed Dolan
 ·  December 19th, 2016  ·   ›

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In December 2016, after a year-long pause, the Fed resumed its tightening of monetary policy. As usual, the action took the form of a quarter point increase in the target range for the federal funds rate (a key rate that banks charge  on short-term loans to one another). Is still more tightening in store?  Most observers think the answer is “yes,” but the Fed is leaving its options open. Its most recent projections, released immediately after its December meeting, hint at the possibility of as many as ten more quarter-point increases over the next three years—or perhaps none at all. So what will actually happen?
The wonkiest number in

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Deplorables Didn’t Elect Trump, Jams Did

December 14, 2016

Author: Ed Dolan
 ·  December 14th, 2016  ·   ›

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Hillary Clinton famously characterized Donald Trump’s voters as a “basket of deplorables,” but she was wrong. Our friends, the British, have figured it out: Trump was elected not by deplorables, but by jams.
“Jams,” short for “Just About Managing,” is the new term has swept British political discourse. They are defined as a social class consisting of people who have jobs and a home, but little by way of savings or discretionary income; people who see themselves as precariously comfortable at best, with nothing to fall back on if adversity strikes.
The instant popularity of the term may have something to do with the way it echoes another

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One Chart Shows Why the Odds Keep RisingThat the Fed Will Raise Rates

December 5, 2016

Author: Ed Dolan
 ·  December 5th, 2016  ·   ›

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Will policymakers at the Fed raise interest rates at their December meeting? Wall Street  oddsmakers increasingly think they will. One simple chart shows why.
The chart tracks the economy’s progress toward the central  bank’s target of “stable prices and maximum employment.”  The Fed’s rate-setting Federal Open Market Committee (FOMC) has operated under this so-called  dual mandate since Congress amended the Federal Reserve Act in 1977. In recent years, the Fed has interpreted “stable prices” to mean a rate of inflation close to 2 percent per year, as measured by the annual change in the price index for personal consumption expenditures

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Trade and Jobs: Why the Protectionist Cure Could be Worse Than the Globalization Disease

November 28, 2016

Author: Ed Dolan
 ·  November 28th, 2016  ·   ›

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Dramatic promises to restrict international trade were a signature element of Donald Trump’s presidential campaign. So far, he seems to be following through, with an early reaffirmation of his intent to withdraw US participation in the Trans-Pacific Partnership (TPP).
An aggressive stance on trade played a key role in gaining the support of working class voters in Midwestern manufacturing states, where upset wins swept him into the White House.  What is more, trade is one area in which Trump, as President, will have the power to act on his own without action by Congress. As Gary Clyde Hufbauer of the Peterson Institute has explained,

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Why Do Top Execs Fear Trump, and Fear to Say So?

September 22, 2016

Author: Ed Dolan
 ·  September 22nd, 2016  ·   ›

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It is not surprising that there is little love for Donald Trump’s presidential candidacy among the leaders of top US multinational corporations. Why then, asks Andrew Ross Sorkin of the New York Times, do they not speak out? Why do they quickly follow up their private comments with, “I could never say that on the record”? I find some of the views reflected in Sorkin’s article disturbing.
The attitudes of top executives would be more understandable if they centered on the issue of free trade, but they do not. Yes, big business has profited from past trade deals and backs new ones like the TPP and TTIP, which Trump promises to cancel.

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A Lesson in Unintended Consequences: How Clinton’s Policies Would Raise Effective Tax Rates for the Middle Class

September 9, 2016

Author: Ed Dolan
 ·  September 9th, 2016  ·   ›

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Hillary Clinton is often said to be a policy wonk, deeply enmeshed in specifics and details, but that may be a mischaracterization. In some ways, her approach seems disturbingly superficial, skipping one perceived problem to another with little attention to their underlying causes. In some cases, Clinton seems to have paid little attention to the unintended consequences of her proposals, as a real policy expert would do. A look at the tax implications of some of her social policy proposals will illustrate these shortcomings.
How progressive? Nominal vs. effective tax rates
Discussions of by both supporters and critics have characterized

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How Occupational Licensing Undermines Labor Fluidity

August 31, 2016

Author: Ed Dolan
 ·  August 31st, 2016  ·   ›

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A healthy economy requires a fluid labor market. Even when total employment and output are stable, the labor market is in constant motion. Jobs disappear when firms close or downsize. Other jobs appear when new firms open or old ones expand. People move freely from one job to another in search of career advancement or better fit between their work and their personal lives.
Unfortunately, the US labor market is becoming less fluid. We can trace part of the decrease in fluidity to outside factors like an aging labor force and changing business practices, but much of it stems from ill-considered labor market policies. Of these, one of the

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The Great Bipartisan War on Free Trade

March 14, 2016

photo: Dirk Dallas Like most economists, I am strongly inclined toward free trade. I cringe to see the way free trade is under attack, from both parties, during this primary season. The two populist candidates are the worst offenders. Bernie Sanders,…

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Why Sanders Healthcare Plan Is on the Right Track

March 4, 2016

photo: Phil Roeder Presidential candidate Bernie Sanders has reopened the healthcare debate by urging America to adopt a system more like that of other wealthy countries. “The United States is the only major country on earth that doesn’t guarantee he…

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Marco Rubio Would Leave Economic Policy Rudderless

February 18, 2016

Author: Ed Dolan  ·  February 18th, 2016  ·   › Share This Print Stabilizing the national economy is one of the federal government’s key responsibilities. Is that too much to ask? OK, then, can we at least ask that the government not make things wors…

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Why Would Anyone Want to Make the US More Like Europe?

February 15, 2016

photo: Moyan Brenn The idea that Democrats want to make America more like Europe is a favorite Republican attack line. Writing in The New York Times, David Brooks expresses amazement that so many millennials are supporting Bernie Sanders, an open adm…

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The Case for Breaking Up Too-Big-To-Fail Banks

February 8, 2016

Author: Ed Dolan  ·  February 8th, 2016  ·   › Share This Print The presidential campaign has brought new attention to the problem of banks that are too big to fail (TBTF). As everyone agrees, the largest banks are bigger than ever. As the following …

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