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Janet Yellen on monetary offset

Benn Steil and Steve directed me to an interesting comment by Janet Yellen during her testimony: . . . certainly that [austerity] has been a headwind on the economy and something we’ve tried to offset . . . It’s around the 1:03 mark.  Just to be clear I’m not claiming she’s a market monetarist.  She […]

Monetary offset in Fedspeak

From the Fed statement, emphasis added: Taking into account the extent of federal fiscal retrenchment, the Committee sees the improvement in economic activity and labor market conditions since it began its asset purchase program a year ago as consistent with growing underlying strength in the broader economy. However, the Committee decided to await more evidence […]

My Mercatus paper on monetary offset

Here is an excerpt from my latest paper for the Mercatus Center. What role does this leave for fiscal policy? What would an effective fiscal stimulus look like? It turns out that fiscal policy could play a role, but only through supply-side channels. Return to the AS/AD diagram discussed above. If policymakers were able to increase aggregate supply, […]

Would it be rude to mention monetary offset?

From The Hollywood Reporter: Royal Baby to Boost British Economy by $400 Million Festivities-related expenses will lead the way with an estimated $131 million (£87 million) in additional business thanks to the royal baby, according to the research. That includes increased spending on alcohol ($94 million, or £62 million), with the group predicting three million […]

John Carney on monetary offset

Here’s John Carney of CNBC: Which is to say, the Fed would like to ease up on monetary accommodation but fears that Congress seems unlikely to implement fiscal policy that won’t restrain growth. To put it differently, if Congress were to “get its act together” and provide fiscal relief to the economy, the Fed likely […]