Tuesday , January 18 2022
Home / Jeffrey Frankel’s Blog

Jeffrey Frankel’s Blog

Inflation is Back, But the 1970s Aren’t

TweetNovember 29, 2021 — Are the US and other advanced countries experiencing stagflation?  Stagflation is the unfortunate combination of high inflation with low growth in output and employment that characterized the mid-1970s.  Are we back in that decade? No.  At least not the US. What it is experiencing now is simply (moderate) inflation, without the stagnation part.  More like the 1960s than the 1970s. It is true that the US headline CPI inflation rate reached 6.2 % over the 12 months...

Read More »

Five phrases coined by Carmen Reinhart

TweetNovember 11, 2021 — Last night, Carmen Reinhart, who is on leave from Harvard Kennedy School to serve as the World Bank’s Chief Economist, gave the Gordon Lecture in the HKS Forum.  (Video here.) I was the moderator. In preparing my questions for her, I was struck by how many memorable phrases Carmen has coined in her research career.  Here is a list of five such phrases.  Three of them have their own Wikipedia entries, which is remarkable. And that doesn’t even count publications of...

Read More »

High oil prices can help the environment

TweetOctober 28, 2021 — Prices of fossil fuels rose sharply in October. The European price for natural gas hit a record peak early in the month. The price of US crude oil, is above $80 a barrel, the highest it has been in seven years. Prices for thermal coal in China have also reached record highs. Heading into the northern winter, consumers in many parts of the world are understandably worried. Explanations for high prices Why the rise in prices?  To be sure, a variety of factors are at...

Read More »

El Salvador exemplifies the surrealism of cryptocurrencies

TweetSeptember 26, 2021 — El Salvador this month became the first country to adopt a cryptocurrency, Bitcoin, as legal tender.  One says “the first” as if there will be others.  But the idea is highly dubious. I will admit, like many economists, that I fail to see what problem cryptocurrencies solve. They aren’t well designed to fulfill any of the classic functions of money — unit of account, store of value, or means of payment – in part because they are so extraordinarily volatile in...

Read More »

The G20 agenda, as the pandemic continues

TweetAugust 28, 2021 — Italy hosts the G20 this year.  The 2021 Summit of the Heads of Government will take place in Rome in October. Officials of member countries, including the finance ministers and central bank governors, are preparing. The G20 meeting will come at a time of great uncertainty as concerns the health and economic effects of the pandemic, midway through its 2nd year.  Although the mechanisms of international cooperation have been badly bruised by events of recent years,...

Read More »

The Virus, Vaccination, and Voting

TweetJuly 25, 2021 — Ever since the 1960s, we have heard the cliché, “If they can put a man on the Moon, why can’t they do X?” where X is usually some goal like eliminating hunger — technologically simpler than the scientific miracle of space flight, but harder to accomplish in practice because it involves human behavior.  In 2021, the salient question is, “If we can accomplish the scientific miracle of developing vaccines capable of ending the Covid-19 pandemic that has killed millions,...

Read More »

How concerned am I about a bubble?

TweetFor The International Economy magazine, Summer Issue, 2021Question: “HOW CONCERNED ARE YOU ABOUT A BUBBLE?” “On a scale of one to ten, how worried are you about the potential for asset bubbles bursting?” My response:  9 out of10 Financial markets are indeed been experiencing bubbles, spurred in part by easy money. Eventually the bubbles will end.  A bursting could have severe adverse consequences for the real economy, as in 1929 or 2008; but fortunately that outcome is not...

Read More »

Maxims of Richard Zeckhauser and errors of commission

TweetJuly 14, 2021 — Richard Zeckhauser, my colleague at Harvard Kennedy School, is indeed legendary.  A book by Dan Levy, titled Maxims for Thinking Analytically: The wisdom of legendary Harvard Professor Richard Zeckhauser, has been released today. I recommend it highly. This is not a collection of tangential papers published together in someone’s honor.  Rather each chapter consists of an immortal maxim of Richard’s together with applications to real-world decision-making, whether at...

Read More »

The Global Outlook

Tweet          This set of questions and answers appears in Capital Magazine in July 2021, translated into Turkish. – There is a second and third wave of coronavirus in many countries while also vaccines are being delivered. How do you see the outlook for the global economy against this backdrop? How has the world economy performed since the beginning of the pandemic? JF: The world economy has performed about as well as could be expected, if one takes as given the pandemic and the...

Read More »

“False Imbalance” in Reporting on Economic Policy

TweetJune 30, 2021 —  One obstacle to productive public discourse and deliberation is a syndrome whereby the media, whether mainstream or otherwise, present policies in a manner that could be called “false imbalance.”  No, I don’t mean “false balance.”  False imbalance is quite different. It refers to the temptation to cast in a negative light, policies that in fact are reasonable attempts to balance competing objectives.  Examples can be drawn from health care, fiscal policy, and...

Read More »