The pandemic has spurred profound changes in the global economy like a tight labor market and elevated inflation that policymakers are only beginning to understand. But one result is clear: The days of historically low interest rates are over. Now, policymakers are wrestling with the question of ... READ MORE >
fiscal policy
The pandemic response: Improving policies in future crises
This is the third article in a series examining major economic policy responses to the pandemic that targeted small and midsize businesses. The first article looks at the Paycheck Protection Program, and the second looks at the Main Street Lending Program. The economic collapse that accompanied the ... READ MORE >
Did fiscal spending go too far? Assessing the global economy.
Fiscal responses by governments around the world during the pandemic were unprecedented. Many governments put forward anywhere between 20% and 30% of gross domestic product in spending to mitigate the impact of economic shutdowns. Now, after months of elevated inflation and surging interest rates, ... READ MORE >
Amid global economic turmoil, stress grips fixed-income markets
Regime change in the global financial markets and the international economy is in play. Investor and policy expectations around globalization, growth and liquidity are all rapidly changing as central banks lift interest rates to put inflation back in the box. It is highly likely that the American ... READ MORE >
In case of emergency break glass: Reviving the enhanced child tax credit to ease inflation
Should the Russian incursion into eastern Ukraine turn into a full-fledged invasion, it is likely that the global and U.S. economies will absorb yet another supply shock. Energy prices will most likely surge in its aftermath, sending inflation higher than the current 7.5%. At this point, given the ... READ MORE >
Looking ahead to 2022 and what to expect in the economy
Nearly two years into the pandemic, there are signs that the worst of a once-in-a-century shock to the global economy is beginning to fade. As the economy approaches a full reopening, we expect growth in 2022 will exceed 4%, the unemployment rate will fall to 3.5% and job growth will average ... READ MORE >
Economic update: GDP to grow above 7% this year as expansion takes hold
The American economy will continue to boom in the second half of the year following what we expect will be 7.8% growth through the first six months. While growth will almost certainly peak in the second quarter at our revised 9.2% forecast, rising wages among workers down the income ladder will ... READ MORE >
Economics of the $1.9 trillion American Rescue Plan Act
President Biden on Thursday signed the $1.9 trillion fiscal aid and stimulus package into law. The American Rescue Plan Act will provide a robust tailwind to the domestic economy as it recovers from the pandemic and will most likely boost gross domestic product by an additional three percentage ... READ MORE >
Flattening Phillips curve implies greater space to address economic needs
The traditional workhorse among policymakers attempting to estimate the tradeoff between employment and inflation has been the Phillips curve. During the past few decades, as the economy has shifted from one based on manufacturing to one based on information and digital technologies, this traditionally ... READ MORE >
Global fiscal policy: Reflation led by fiscal firepower
Despite efforts over the past four years to tear down the underpinnings of the global economy, pandemic economics has reinforced that this is indeed a global economy. Every one of the major-currency economies suffered through a health crisis and negative economic growth last year, according to the most ... READ MORE >