THOUGHT LEADERS

The Magic of the Market

Martin Feldstein

Will the most dramatic interventions in financial markets since the Great Depression result in a long-term expansion of the role of government? Can America survive trillion-dollar deficits and restore growth? Will the need for closer policy coordination forge a more integrated Europe? What long-term effects will the financial crisis have on emerging markets?

RECENT COMMENTARIES

FEATURED COMMENTARIES

America’s Growth in the Decade Ahead

Martin Feldstein Series: The Magic of the Market

2010-01-25

Although the strength of the US economy in 2010 is still uncertain, it is important to look ahead to its likely performance in the coming decade. Adding up all the key components of GDP, annual economic growth is likely to be about 1.9%, or roughly the same as the average rate over the past ten years.... read

Comments: 0 Recommended: 0 Read: 4754

Is Gold a Good Hedge?

Martin Feldstein Series: The Magic of the Market

2009-12-25

Many gold buyers want a hedge against the risk of inflation or possible declines in the value of the dollar or other currencies. But gold is an exceptionally poor hedge against both of these risks, particularly compared to the alternatives, such as inflation-protected government bonds and currency futures, that are available to investors.... read

Comments: 13 Recommended: 0 Read: 15976

Can the Euro Zone Survive Economic Recovery?

Martin Feldstein Series: The Magic of the Market

2009-11-25

The economic recovery that the euro zone now anticipates in 2010 could bring with it new tensions. Indeed, in the extreme, some countries with lingering high unemployment could find themselves considering whether to leave the single currency altogether.... read

Comments: 2 Recommended: 2 Read: 7676

The Global Impact of America’s Health Care Debate

Martin Feldstein Series: The Magic of the Market

2009-10-26

Barack Obama’s health-care proposals are meeting strong opposition at home, owing to their potential impact on future fiscal deficits. And, because those deficits are the primary cause of America’s current-account deficit – and thus of global imbalances – the US health-care debate’s outcome will affect governments and investors around the world.... read

Comments: 0 Recommended: 0 Read: 4196

The G-20’s Empty Promises

Martin Feldstein Series: The Magic of the Market

2009-09-17

When the heads of the G-20 countries gather in Pittsburgh, they will promise not only to reverse the explosive monetary and fiscal expansion of the past two years, but that they will do it neither too soon nor too late and in a coordinated way. These are the right things to promise, but what will such promises mean? ... read

Comments: 2 Recommended: 0 Read: 5112

The Global Impact of America’s Housing Crisis

Martin Feldstein Series: The Magic of the Market

2009-08-25

Although it is tempting to think of the downward spiral in US house prices as a purely domestic problem, nothing could be further from the truth. If the decline continues, the value of mortgage-backed securities held by financial institutions around the world will continue to decline, and the further erosion of household wealth will mean lower US import demand.... read

Comments: 0 Recommended: 0 Read: 5906

America’s Saving Rate and the Dollar’s Future

Martin Feldstein Series: The Magic of the Market

2009-07-24

American households' saving rate has increased sharply since the beginning of the year, as falling equity and home prices have rapidly eroded their wealth. But, while that should lead to a lower dollar, which would narrow America's trade deficit and stimulate employment, the sharply higher US fiscal deficit will complicates matters considerably.... read

Comments: 1 Recommended: 0 Read: 9119

Will Cap-and-Trade Incite Protectionism?

Martin Feldstein Series: The Magic of the Market

2009-06-25

In contrast to a carbon tax, there is a serious danger that the international adoption of cap-and-trade legislation to limit carbon-dioxide emissions would trigger a new round of protectionist measures. As a result, cap-and-trade policiescould produce significant harmful economic effects in the near term that would continue into the future.... read

Comments: 0 Recommended: 0 Read: 7892

Has the US Recovery Begun?

Martin Feldstein Series: The Magic of the Market

2009-05-25

Although the Obama administration's stimulus package of tax cuts and increased spending will give a temporary boost to GDP growth, a sustained upturn is unlikely until next year at the earliest. And that assumes that the administration strengthens its policies in the coming months to increase demand, fix the banking system, and stop the decline in house prices.... read

Comments: 0 Recommended: 0 Read: 8448

Deflation Doldrums?	Martin Feldstein
The rate of inflation is now close to zero in the US and several other major countries. Deflation is potentially a very serious problem, because falling prices – and the expectation that prices will continue to fall – would make the current economic downturn worse in three distinct ways.... read

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