Contributor
Jeffrey Frankel, Professor of Capital Formation and Growth, Harvard University
Biography provided by participant
Jeffrey A. Frankel is James W. Harpel Professor of Capital Formation and Growth. He directs the Program in International Finance and Macroeconomics at the National Bureau of Economic Research, where he is also on the Business Cycle Dating Committee, which officially declared the 2001 recession. Nominated by President Clinton in 1996 to be a member of his Council of Economic Advisers, Frankel's responsibilities included international economics, macroeconomics, and the environment. Before coming to Harvard in 1999, he was Professor of Economics at the University of California at Berkeley, having joined the faculty in 1979. Past appointments also include the Federal Reserve, Institute for International Economics, International Monetary Fund, University of Michigan, and Yale University. His research interests include international finance, monetary policy, regional blocs, and international environmental issues. Books include American Economic Policy in the 1990s (2002). Born in San Francisco in 1952, he graduated from Swarthmore College in 1974, and received his economics PhD from MIT in 1978.
Recent Responses
November 15, 2010 10:48 AM
The Pot Again Calls the Kettle Black I don’t know if some Republicans are trying to stake out a position that Democrats are pursuing monetary policy that is inflationary. If so, they are on very shaky ground. I will leave it to others to point out how low is the risk of inflation now, with the real economy having only begun to recover from its nadir of early 2009. Or to acknowledge that QE2 is only a second best policy response. (The job could be done much better by fiscal policy.) I will, rather, respond to…
Read moreOctober 12, 2010 06:52 PM
State Governments Are Cutting Jobs Over the last year, growth in overall employment has been painfully slow. Private sector jobs have increased, but lately this has been offset by declining government employment. Indeed in September a gain of 64,000 private jobs was more than outweighed by a loss of 159,000 government jobs. Earlier in the year, the loss of government jobs took the form of a winding down of the census. But increasingly it signals that state and local governments are laying off workers. There isn’t much silver lining here. What there is, instead, is evidence that the ending of…
Read moreOctober 4, 2010 10:50 AM
Without More Stimulus, It's Time for QE2 I really don’t know how my friend Charlie Calomiris can say that “The problem is not a deficiency of demand relative to supply, but rather a deficiency of supply.” What is 9.6% unemployment but a deficient demand for labor, relative to supply? What is the record level of unsold homes but a deficient demand for housing, relative to supply? What is a level of GDP that has not yet re-attained its preceding peak but a deficient demand for goods and services? At this point, short-term fiscal stimulus would be by far the…
Read moreSeptember 27, 2010 10:18 AM
GOP Pledges To Repeal Laws Of Arithmetic Updated at 10:18 a.m. As I understand it, the authors of the “Pledge to America” want not just to renew permanently all Bush-era tax cuts, but also to balance the budget while exempting social security, Medicare, and military spending. To ask what would be the effects if the Republicans put the pledge into law is to ask what would be the effects if they repeal the laws of arithmetic. It can’t be done, because all the money is in the parts of the budget they are putting off limits. (That is what we…
Read moreAugust 23, 2010 10:49 AM
Many Better Options The economy is still weak, calling for additional stimulus in the short-term. At the same time, however, adjusting the reckless long-term fiscal path that we have been on at least since 2001 grows more urgent every year. The obvious goal for any stimulus should be to maximize bang for the buck. “Bang” means short-term stimulus to demand. “Buck” refers to the long-term cost in terms of the national debt. Intelligent fiscal policy could get us where we want to go. Yet one of the two political parties amazingly continues to insist on measures that minimize bang for…
Read moreAugust 3, 2010 12:10 PM
Updated at 10:32 a.m. on Aug. 4. The NBER Business Cycle Dating Committee, of which I am a member, no longer relies exclusively on the GDP measure of national output, and puts some important weight on the national income measure, as Jeremy Nalewaik urges. Indeed, this was one reason why we dated the most recent peak at 2007 QIV. At the time when we made that call, the GDP measure told a different story. It is striking that GDP, after the advance estimate, tends to get revised in the direction of national income, rather than the other way around. It…
Read moreJune 28, 2010 08:43 AM
Let Bush's Tax Cuts Expire The Bush tax cuts for the rich should be allowed to expire. That means the rich would pay more than they have in recent years, but not more than was called for in the tax laws passed in 2001 and 2003. Bush's one-year abolition of the estate tax (this year, 2010) was particularly bad policy; the right number for tax-free estates is greater than $1 million but less than infinity. Having said that, a complete package to get the budget deficit under control will at some point in the future have to include, not just…
Read moreJune 14, 2010 09:31 AM
It Makes Sense The balancing out of spending cuts (freezing some spending for three years) and spending increases (emergency aid to states) does constitute stimulus and does make sense, because of the timing: the economy needs the stimulus now, this year, but the need to return to budget discipline will begin to predominate over the three-year horizon. …
Read moreJune 1, 2010 09:41 AM
Save it For the Future Energy security” has received increased emphasis ever since September 11, 2001. The energy security argument is viewed as able to tip the balance between the dueling environmental and business arguments. Usually it is taken as self-evident that the energy security goal argues in the direction of increased exploitation of domestic oil resources: “Drill, Baby, Drill.” But some of us have long thought that a more appropriate slogan for the policy of using domestic reserves as aggressively as possibly would be “Drain America First.” A true understanding of energy security could tip the balance the…
Read moreApril 19, 2010 09:01 AM
A member comments I will simply make three points, which many of you know: (1) The NBER Business Cycle Dating Committee views its job as trying to be definitive when calling turning points, leaving it to others to try to be fast. (2) To be definitive it helps that we don’t have a habit of revising dates after we have announced them. And (3) To minimize the risk of having to revise a trough date, it is necessary that during an expansion we wait until we can answer the hypothetical question whether a new sharp negative shock would count as…
Read moreFebruary 22, 2010 01:08 PM
China will not be left holding the bag. Updated at 5:10 p.m. on Feb. 22. The year 2009 marked a watershed in the new assertiveness of Chinese officials on a variety of fronts, in line with their country's rising economic power. Most conspicuously, Premier Wen and PBoC Governor Zhou were not shy about expressing their concerns over the ability of US treasury bills to retain their value. It is of course true that a renewed slide of the dollar would hurt the People’s Bank of China and other Asian investors more than anybody, because they hold the most dollars. Many commentators…
Read moreFebruary 8, 2010 10:59 AM
On Cutting Tax Expenditures I agree with the proposal completely. With regard to the politics, one would have to see whether the phrase “cut tax expenditures” polls more like the phrase “cut expenditures,” which I assume polls well, or like the phrase “raise taxes,” which of course polls horribly. I have no idea. With regard to the merits of the idea as economic policy -- in a context where strong measures to reduce the budget deficit will be necessary in coming years -- Len Burman is completely right. Agreeing to the general principle is easier than agreeing…
Read moreDecember 21, 2009 12:18 PM
Updated at 12:29 p.m. on Dec. 23. I agree with Greg that the dominant empirical fact about investment is its procyclical volatility (the main reason investment has been depressed for the last two years is that the economy has been depressed), and also that the recent credit crunch made it worse. But I don't agree with a third item on his list: "the policy environment seems adverse to business." As in many areas, it is when we get to the politics that I disagree. Greg cites trade policy, fiscal imbalances, and energy costs, in support of his proposition that the…
Read moreDecember 1, 2009 07:56 PM
I agree with Donald Marron, that most of the greenhouse gas emission permits should be auctioned off, not given away to firms (which would confer windfall profits). This is what President Obama originally proposed last February, but it is not in the congressional climate change legislation. Raise the gas tax. Cut agricultural subsidies to rich farmers and agribusiness, saving money and improving economic efficiency. This is another measure that Obama proposed when he first took office, but that was voted down. Continue to cut expensive weapons systems that the military doesn’t want, but are kept only because the suppliers are…
Read moreNovember 16, 2009 12:13 PM
Updated at 3:17 p.m. on Nov. 16. I do think that measures such as the Contingent Convertible Bonds would be a useful step. (I am pleased to agree with Charlie Calomiris on this one.) Some argue that it would be hard to know when to invoke the contingency clause. It strikes me that this argument largely vanishes when one realizes that the clause would of necessity be invoked by the time we got to the stage of a Bear Stearns or Lehman Brothers bankruptcy. CoCos would not go very far in themselves toward comprehensive reform of the financial system, if…
Read moreNovember 9, 2009 09:46 AM
Updated at 9:59 a.m. on Nov. 9. I am astounded at the claim of my friend Charlie Calomiris that government spending under recession circumstances doesn’t create jobs. Does he think that the increase in demand doesn’t raise aggregate output, because the federal debt crowds out private production? That would be hard to believe, at a time when the Fed is keeping interest rates at zero, and long-term interest rates are also quite low. The lecturing to Democrats about the evils of the national debt takes real chutzpah, after Presidents Reagan, Bush I and Bush II increased it ten-fold during times…
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