Fiscal Policy Archive

The Day Ahead in DC

A true day of infamy! Financial reform and fiscal policy… 9:45 am – President Obama speaks on fiscal policy. At the opening of the inaugural meeting of the National Commission on Fiscal Responsibility and Reform. 10:00 am – Permanent Subcommittee on Investigations hearing on the financial crisis. The hearing should run through ...Read More

Richard Koo on fiscal policy and interest rates

[Skip to the end] Met Richard years ago. Seems he’s still confused on fiscal policy: Bond issues to fund capital injections will not lead to higher interest rates Right! The CB sets rates. Too bad he didn’t stop here rather than try to explain the process. Japan’s second round of capital injections ...Read More

Posen on Japan and fiscal policy

[Skip to the end] Adam is pretty much right on with this. Perhaps more interesting is that the deficit terrorists at Peterson keep him on the payroll: Must We Repeat Japan’s Stimulus Mistakes? (Answer: Not Necessarily) by Gerald F. Seib Feb 2 (Wall Street Journal) — Adam Posen, deputy director of the ...Read More

Re: Unilateral Fiscal Policy is more Beneficial than a Coordinated Response

[Skip to the end] Dear Philip, Yes, there is a general shortage of aggregate demand. However, if any one nation uses a fiscal adjustment to restore demand it will be that much better off if the rest of the world does not increase its aggregate demand. Fiscal adjustments, much like imports, provide ...Read More

The upcoming fiscal policy changes

Another possibility is the Fed doesn’t want to cut rates due to inflation risks, and might see a tax cut as sufficient potential support for demand to allow them to not cut rates and instead address the inflation issue. This would be based on the mainstream notion (not mine) that monetary policy ...Read More

Libor Settings, Eur, and UK leading the way lower…

Currency TERM Today Monday Friday Thursday Wednesday Tuesday USD ON 4.40 4.4175 4.3025 4.30 4.34 4.4325   1M 4.94875 4.965 4.99625 5.0275 5.1025 5.20375   3M 4.92625 4.94125 4.96625 4.99063 5.057 5.11125 EUR ON 3.8275 3.98875 3.85875 4.04625 4.055 4.05   1M 4.58813 4.92375 4.93375 4.935 4.945 4.9225   3M 4.84875 4.94688 ...Read More