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Jeffrey Frankel’s Blog

Moore on Gold and Commodities

TweetApril 30, 2019 —   A century ago, the gold standard was considered a guarantor of monetary stability.  That golden era is long-gone.  (If it ever really existed at all.  The general price level fell 53% in US and 45% in the UK during 1873-1896 due to a dearth of gold deposit discoveries.) Continuing my thoughts on the Fed candidacy of Stephen Moore: he has said several times that he favors a return to gold.  In true Trumpian fashion, he recently denied having said it despite the...

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Moore Troubles for the Fed

TweetApril 30, 2019 — Of the two men whom Donald Trump had intended to nominate to empty seats on the Federal Reserve Board, Herman Cain has now withdrawn his name.  This leaves the other one, Stephen Moore. The Senate would have to decide whether to confirm Moore. He has some problems roughly analogous to Cain’s:  he is considered to be under an ethical cloud and he often gets his economic facts wrong.  Cynics might respond that he would thereby fit right in with the roster of Trump...

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Xi & Trump Miss a Chance to Expand Markets

Tweet March 24, 2019 — Donald Trump has postponed until April the supposed deadline for a conclusion to China-US trade negotiations.  A good outcome for both sides would have China agree to better protect private property rights and to reduce the role of the state in its economy; the US agree to strengthen national saving and public investment; and both sides agree to reverse their recent tariff increases and the resulting shrinkage of international markets.  Unfortunately this deal is...

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Bold Ideas are Not Always Better than Old Ideas

Tweet February 28 — US Democrats are moving to the left, we are told.  It is not yet clear that the median voter is in fact moving left, nor the median congressman who was elected last November.  But it is clear that many of the candidates for the 2020 Democratic presidential nomination are experimenting with “bold new ideas”, or at least bold rhetorical formulations.  They are receiving what seems a disproportionate amount of attention for doing so.  Many of the policy proposals, if...

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The euro’s first 20 years

January 28, 2019 —   In Europe, twenty years ago this month, 11 long-standing national currencies disappeared and were replaced by the new single currency, the euro.  Since then, the euro has had its successes and failures. Let us review the experience of the euro’s first two decades.  Where there were failures, to what extent were they the result of avoidable technical mistakes?  Of warnings not heeded?  Or were they the inevitable result of a determination to go ahead with monetary...

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New Year questions about the economic outlook

January 1, 2019 – Five questions about the international economic outlook, from Chosun Ilbo (the leading Korean newspaper), and my replies: US president Trump and China’s president Xi agreed to a temporary ceasefire, in which the US suspended to impose higher tariffs on Chinese imports next year. How do you see the Trade War is going? How would it affect the global economy next year? The trade war is not going well, for either the United States or its trading partners. It is good that...

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Six right predictions in 2018

December 30, 2018 –– I realize that compiling a list of one’s own past forecasts is self-indulgent.  But perhaps there are readers who will indulge me too, as I run through six predictions that – it seems to me – were mostly proven right this past year. Volatility, as measured by the VIX, had been too low and would rise. The stock market was too high and would fall. Trump would switch from attacking the Fed for low interest rates, as he had during 2010-2016, to attacking it for raising...

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3 Book Recommendations: Openness & Progress

December 25, 2018 — I was asked for 2 or 3 end-of-year book recommendations.  My choices are Pinker, Irwin & Clausing. Recommendation 1 Steven Pinker, Enlightenment Now: The Case for Reason, Science, Humanism, and Progress (Viking Press, 2018). The assertion is hard to believe, and Pinker (Psychology Department, Harvard) knows that.  But the trends in various aspects of human welfare are upward and onward: “life, health, prosperity, safety, peace, knowledge, and happiness are on the...

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The Lesson from George H.W. Bush’s Tax Reversal

Dec. 13, 2018 —  When President George H.W. Bush was laid to rest earlier this month, the remembrances appropriately remarked on his general decency and competence.  In public commentary, the encomiums tend to be followed by a “but.”  For journalists and historians, it is “but he was only a one-term president.”  He lost the election of 1992, in part because of the recession of 1990-91.  For members of his own political party, the “but” is, “but he broke with the legacy of Ronald Reagan...

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Gopinath follows Obstfeld at the IMF, in a great tradition

Dec. 10, 2018 — Maury Obstfeld this month completes his exemplary term as Chief Economist at the International Monetary Fund. His departing economic outlook foresees slowing growth in the world economy in 2019 and 2020. Gita Gopinath, my Harvard colleague, will take up the position in the new year.  (Technically the title is Economic Counsellor and Director of the Research Department.) In the last three decades there have been 8 Economic Counsellors of the IMF.  As it happens, every one...

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