Santa-Barbara political economy professor Benjamin Cohen proposes new fiscal stimulus to complement the current low-interest-rate monetary policy.

Daphne Basel

2019-08-28 14:46:00 Wed ET

Santa-Barbara political economy professor Benjamin Cohen proposes new fiscal stimulus to complement the current low-interest-rate monetary policy. Cohen finds that global interest rates persist at low thresholds in the current decade. In OECD and several other economies, low interest rates cannot bounce back too far from the zero lower bound during the global financial crisis.

In Europe, Japan, and Switzerland, the risk-free interest rates fall below zero. In this context, most central banks have little room for new interest rate reductions as the global economy gradually moves toward the next recession. In response to the current Sino-U.S. trade truce and Brexit economic uncertainty, Cohen proposes new countercyclical fiscal stimulus as a key alternative policy instrument for global economic revival. This new fiscal stimulus can manifest in the generic form of tax credits, transfer payments, and public expenditures in health care, infrastructure, education, and technology. Nevertheless, Cohen adds the cautionary caveat that lawmakers may remain reluctant to increase core fiscal deficits on top of post-crisis national debt mountains. To the extent that legislators become wary of backlash in parliamentary elections, it is important for politicians and technocrats to strike a better balance between democratic accountability and elite interest entrenchment.

 


If any of our AYA Analytica financial health memos (FHM), blog posts, ebooks, newsletters, and notifications etc, or any other form of online content curation, involves potential copyright concerns, please feel free to contact us at service@ayafintech.network so that we can remove relevant content in response to any such request within a reasonable time frame.

Blog+More

Yale macro economist Stephen Roach draws 3 major conclusions with respect to the Chinese long-run view of the current tech trade conflict with America.

Joseph Corr

2019-09-05 09:26:00 Thursday ET

Yale macro economist Stephen Roach draws 3 major conclusions with respect to the Chinese long-run view of the current tech trade conflict with America.

Yale macro economist Stephen Roach draws 3 major conclusions with respect to the Chinese long-run view of the current tech trade conflict with America. Firs

+See More

Apple CEO Tim Cook maintains a frugal low-key lifestyle.

Jonah Whanau

2019-10-11 13:40:00 Friday ET

Apple CEO Tim Cook maintains a frugal low-key lifestyle.

Apple CEO Tim Cook maintains a frugal low-key lifestyle. With $625 million public wealth, Cook leads the $1 trillion tech titan Apple in the post-Jobs era.

+See More

Generative artificial intelligence (Gen AI) uses large language models (LLM) to create online contents with better human productivity.

Monica McNeil

2024-10-31 09:26:00 Thursday ET

Generative artificial intelligence (Gen AI) uses large language models (LLM) to create online contents with better human productivity.

Generative artificial intelligence (Gen AI) uses large language models (LLM) and content generation tools to enhance human lives with better productivity.

+See More

Federal Reserve remains patient on future interest rate adjustments due to trade and fiscal budget negotiations.

Becky Berkman

2019-02-04 07:42:00 Monday ET

Federal Reserve remains patient on future interest rate adjustments due to trade and fiscal budget negotiations.

Federal Reserve remains patient on future interest rate adjustments due to global headwinds and impasses over American trade and fiscal budget negotiations.

+See More

The Trump administration weighs the pros and cons of a potential mega merger between AT&T and Time Warner.

Laura Hermes

2018-05-08 13:39:00 Tuesday ET

The Trump administration weighs the pros and cons of a potential mega merger between AT&T and Time Warner.

The Trump administration weighs the pros and cons of a potential mega merger between AT&T and Time Warner. Recent stock prices show favorable trends for

+See More

Geopolitical alignment often reshapes and reinforces asset market fragmentation in the broader context of financial deglobalization.

Olivia London

2025-07-01 13:35:00 Tuesday ET

Geopolitical alignment often reshapes and reinforces asset market fragmentation in the broader context of financial deglobalization.

In recent times, financial deglobalization and asset market fragmentation can cause profound public policy implications for trade, finance, and technology w

+See More