- Title Pages
-
Part I Global Warming -
Chapter 1 Climate Change -
Chapter 2 Global Climate Change -
Chapter 3 A New Agenda for Global Warming -
Chapter 4 A Meaningful Second Commitment Period for the Kyoto Protocol -
Part II The International Economy -
Chapter 5 Divergent Views on the Coming Dollar Crisis -
Chapter 6 U.S. Offshoring -
Chapter 7 Advance Market Commitments -
Chapter 8 Should We Still Support Untrammeled International Capital Mobility? Or Are Capital Controls Less Evil Than We Once Believed? -
Part III Economics of the Iraq War -
Chapter 9 The Economic Cost of the Iraq War -
Chapter 10 The High Cost of the Iraq War -
Part IV Fiscal Policy -
Chapter 11 Sense and Nonsense About Federal Deficits and Debt -
Chapter 12 Government Deficits and the Deindustrialization of America -
Part V Social Security -
Chapter 13 Confusions About Social Security -
Chapter 14 The Many Definitions of Social Security Privatization -
Chapter 15 The Virtues of Personal Accounts for Social Security -
Chapter 16 Could Social Security Go Broke? -
Part VI Tax Reform -
Chapter 17 A Broader Perspective on the Tax Reform Debate -
Chapter 18 Tax Reform -
Chapter 19 Taxes on Investment Income Remain Too High and Lead to Multiple Distortions -
Chapter 20 Progressive Consumption Taxation as a Remedy for the U.S. Savings Shortfall -
Part VII Social Policy -
Chapter 21 Was Welfare Reform Successful? -
Chapter 22 Cutting the Safety Net One Strand at a Time -
Chapter 23 The Choose-Your-Charity Tax -
Chapter 24 Should the Government Rebuild New Orleans or Just Give Residents Checks? -
Chapter 25 Does College Still Pay? -
Chapter 26 How to Deal with Terrorism -
Part VIII The Death Penalty -
Chapter 27 The Economics of Capital Punishment -
Chapter 28 On the Economics of Capital Punishment -
Chapter 29 The Death Penalty -
Chapter 30 Reply to Donohue and Wolfers on the Death Penalty and Deterrence -
Chapter 31 Letter -
Chapter 32 Reply -
Part IX Real Estate -
Chapter 33 Long-Term Perspectives on the Current Boom in Home Prices -
Chapter 34 The Menace of an Unchecked Housing Bubble -
Chapter 35 What to Do About Fannie and Freddie? - Index
Divergent Views on the Coming Dollar Crisis
Divergent Views on the Coming Dollar Crisis
- Chapter:
- (p.39) Chapter 5 Divergent Views on the Coming Dollar Crisis
- Source:
- The Economists' Voice
- Author(s):
J. Bradford DeLong
- Publisher:
- Columbia University Press
This chapter sets out the two contrasting views among economists on the likely consequences of America's huge current account deficit. Domestically oriented macroeconomists see a forthcoming fall in the value of the dollar not as a crisis but as an opportunity to accelerate growth. International finance economists, on the other hand, see a financial crisis as likely, followed by a painful and perhaps prolonged recession in the United States. When international finance economists sketch this scenario, domestically oriented macroeconomists respond that it sounds like a case of incompetent monetary policy. Why should the Federal Reserve allow long-term interest rates to spike just because other central banks have ceased their dollar-purchase programs? Should not the Federal Reserve step in and replace them with its own purchases of long-term U.S. Treasury bonds, thereby keeping long-term interest rates at a level conducive to full employment? To this, international finance economists respond that the Federal Reserve will not wish to do so. When forced to choose between full employment and price stability, the Federal Reserve will choose price stability because its institutional memory of the 1970s, when inflation ran rampant, remains very strong.
Keywords: US economy, macroeconomic policy, current account deficit, economists, US dollar, monetary policy, interest rates, Federal Reserve, price stability
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- Title Pages
-
Part I Global Warming -
Chapter 1 Climate Change -
Chapter 2 Global Climate Change -
Chapter 3 A New Agenda for Global Warming -
Chapter 4 A Meaningful Second Commitment Period for the Kyoto Protocol -
Part II The International Economy -
Chapter 5 Divergent Views on the Coming Dollar Crisis -
Chapter 6 U.S. Offshoring -
Chapter 7 Advance Market Commitments -
Chapter 8 Should We Still Support Untrammeled International Capital Mobility? Or Are Capital Controls Less Evil Than We Once Believed? -
Part III Economics of the Iraq War -
Chapter 9 The Economic Cost of the Iraq War -
Chapter 10 The High Cost of the Iraq War -
Part IV Fiscal Policy -
Chapter 11 Sense and Nonsense About Federal Deficits and Debt -
Chapter 12 Government Deficits and the Deindustrialization of America -
Part V Social Security -
Chapter 13 Confusions About Social Security -
Chapter 14 The Many Definitions of Social Security Privatization -
Chapter 15 The Virtues of Personal Accounts for Social Security -
Chapter 16 Could Social Security Go Broke? -
Part VI Tax Reform -
Chapter 17 A Broader Perspective on the Tax Reform Debate -
Chapter 18 Tax Reform -
Chapter 19 Taxes on Investment Income Remain Too High and Lead to Multiple Distortions -
Chapter 20 Progressive Consumption Taxation as a Remedy for the U.S. Savings Shortfall -
Part VII Social Policy -
Chapter 21 Was Welfare Reform Successful? -
Chapter 22 Cutting the Safety Net One Strand at a Time -
Chapter 23 The Choose-Your-Charity Tax -
Chapter 24 Should the Government Rebuild New Orleans or Just Give Residents Checks? -
Chapter 25 Does College Still Pay? -
Chapter 26 How to Deal with Terrorism -
Part VIII The Death Penalty -
Chapter 27 The Economics of Capital Punishment -
Chapter 28 On the Economics of Capital Punishment -
Chapter 29 The Death Penalty -
Chapter 30 Reply to Donohue and Wolfers on the Death Penalty and Deterrence -
Chapter 31 Letter -
Chapter 32 Reply -
Part IX Real Estate -
Chapter 33 Long-Term Perspectives on the Current Boom in Home Prices -
Chapter 34 The Menace of an Unchecked Housing Bubble -
Chapter 35 What to Do About Fannie and Freddie? - Index
