Must-Read: Olivier Blanchard et al.: ion”>

Must-Read: Olivier Blanchard et al., eds.: Progress and Confusion: The State of Macroeconomic Policy: “What will economic policy look like…

…once the global financial crisis is finally over? Will it resume the pre-crisis consensus, or will it be forced to contend with a post-crisis ‘new normal’? Have we made progress in addressing these issues, or does confusion remain?… Prominent figures—including Ben Bernanke, Lawrence Summers, and Paul Volcker—offer… essays that address topics that range from the measurement of systemic risk to foreign exchange intervention. The chapters address whether we have entered a ‘new normal’ of low growth, negative real rates, and deflationary pressures, with contributors taking opposing views; whether new financial regulation has stemmed systemic risk; the effectiveness of macro prudential tools; monetary policy, the choice of inflation targets, and the responsibilities of central banks; fiscal policy, stimulus, and debt stabilization; the volatility of capital flows; and the international monetary and financial system, including the role of international policy coordination…. Is there progress or confusion?… Both. Many lessons have been learned; but, as the chapters of the book reveal, there is no clear agreement on several key issues.