Pinelopi Koujianou Goldberg on Inflation Targets, Deglobalization, US-China Tensions

Pinelopi Koujianou Goldberg, Pinelopi Koujianou Goldberg Says More… Project Syndicate: Last July, you criticized the prevailing approach to tackling inflation in the United States, arguing that interest-rate hikes would be “insufficient to rein in inflation in the short run” and “likely [to] increase unemployment over time.” Since then, the US Federal Reserve has continued to hike rates, inflation […]

Another Annus Horribilis for the Fed

Mohamed A. El-Erian, CAMBRIDGE – On the 40th anniversary of her accession to the throne, Queen Elizabeth II remarked that, “1992 is not a year on which I shall look back with undiluted pleasure. In the words of one of my more sympathetic correspondents, it has turned out to be an annus horribilis.” The late […]

Financial Deglobalization Must Come Next

Jayati Ghosh, NEW DELHI – After four decades of fostering integration through trade and finance, the global economy has begun a painful process of fragmentation. Initially driven by wealthy countries – namely, the United States under former President Donald Trump and the United Kingdom following the Brexit referendum – several geopolitical forces have combined to […]

Liz Truss vs. the Bank of England

Shang-Jin Wei, NEW YORK – Following a week of financial-market turbulence, UK Prime Minister Liz Truss was forced to scrap her plan to abolish the 45% top income-tax rate for high earners. This U-turn, an attempt to counter a stunning market sell-off that caused the pound to crash and saw the Bank of England launch a massive […]

Why US Inflation Is Headed Down

Dambisa Moyo, NEW YORK – US inflation remained stubbornly high in August, with prices increasing at an annual rate of 8.3%. While this higher-than-expected increase has disappointed some economists, US Federal Reserve Chair Jerome Powell’s commitment to raising interest rates – which he emphasized in his recent Jackson Hole speech – will surely dent US inflation by squeezing demand. And […]

Understanding Recent US Inflation

Robert J. Barro, CAMBRIDGE – When considering what caused the sharp increase in the US inflation rate from late 2020 to today, my initial instinct was to focus on aggressive monetary policy, following Milton Friedman’s famous dictum that, “inflation is always and everywhere a monetary phenomenon.” But while monetary policy is important, aggressive fiscal policy may have been more […]

America’s Wage-Price Persistence Must Be Stopped

Jason Furman, CAMBRIDGE – Recent price- and wage-growth data make it increasingly clear that the US economy’s underlying inflation rate is at least 4% and more likely to be rising than falling. Although the Federal Reserve has acted forcefully in recent months to contain inflation, unfortunately it will need to stick to its plan of […]

Yes, the US Economy Is Likely in Recession

Robert J. Barro, CAMBRIDGE – The latest figures from the Bureau of Economic Analysis (BEA) show that the US economy has experienced two consecutive quarters of negative real (inflation-adjusted) GDP growth. That accords with a popular definition of a recession. But economists have noted that any official declaration of a US recession must come instead from the National Bureau […]

Will Sanctioning Russia Fuel Financial Contagion?

Hippolyte Fofack, CAIRO – The unprecedented sanctions imposed on Russia – which some have dubbed economic weapons of mass destruction – have globalized the Ukraine crisis, exacerbating market uncertainty and potentially derailing the post-pandemic recovery. Across Europe and elsewhere, growth forecasts for 2022 have been revised down sharply. Beyond dampening output and causing already high inflation to […]

Russia’s War and the Global Economy

Nouriel Roubini, NEW YORK – Now that Russian President Vladimir Putin has launched a full-scale invasion of Ukraine, we must consider the economic and financial consequences of this massive historic development. The Ukraine war is not just another minor, globally inconsequential conflict of the kind seen in recent decades. This is a major escalation of […]

The Upside of US Inflation

Edward N. Wolff, NEW YORK – Anxiety about inflation, among citizens and politicians alike, has been peaking recently. In the United States, the year-on-year increase in consumer prices reached 7.5% in January, the highest rate since February 1982. If people’s incomes increase by less than the rate of inflation, their real incomes decline, and they cannot afford […]

The Justices Doth Protest Too Much

Eric Posner, CHICAGO – This week, the US Supreme Court begins its 2021 term amid a buzz of speculation that it has lost the public’s confidence. A recent Gallup poll finds that only 40% of the public approves of the way the Court handles its job – the lowest level since the survey began in 2000 (when […]