Articles and Publications
The Fed’s Strategic Approach to Monetary Policy Needs a Reboot
Fed Chair Powell has announced the Fed will conduct a strategic review of monetary policy later this year. This article, co-written by Mickey D. Levy and Charles I. Plosser, focuses on the characteristics and failures of the strategic framework that the Fed adopted in 2020 and how this framework contributed to monetary policy mistakes and high inflation. It provides suggestions on issues the Fed should consider in its upcoming strategic review.
America’s Economic Riddle
This is a podcast conversation between Mickey Levy and Bill Whalen of the Hoover Institution at Stanford University. It was part of Whalen's podcast series Matters of Policy & Politics. The pair discusses trends in employment and unemployment, factors underlying inflation, and the implications of dramatically higher prices during this presidential election year. With the "misery index" (the sum of the rates of inflation and unemployment) so low, why do so many express unhappiness with economic performance? They then discussed the difficult issues facing the Federal Reserve, and prospects for monetary policy and interest rates.
Time for Fed to Recalibrate View of What’s Restrictive?
Here is an interview with Kathleen Hays on her podcast, Central Bank Central. It is based on Levy's Wall Street Journal opinion piece, "The Fed's Latest Problem: A Strong Economy." The discussion sets the stage for assessing the upcoming Fed semiannual Monetary Policy Report to Congress and the March 19-20 FOMC meeting in which the Fed will provide its updated Summary of Economic Projections.
The Fed’s Latest Problem: A Strong Economy
WSJ Commentary: My original title was "Strong Real Growth and High Real Rates." My general thrust is that following the monetary and fiscal excesses in response to the negative shock of the pandemic that generated high inflation, the Fed must now adjust its monetary policy to reflect the pickup in productivity and economic growth that raise the natural real rate of interest. The higher real rates provide less room for the Fed to lower rates and remain consistent with its 2% inflation target.
Interview on Central Bank Central Podcast with Kathleen Hays
Kathleen Hays interviewed Mickey D. Levy about the tough balancing act ahead for the fed as a key inflation gauge remains high.
The Fed Won’t Try to Boost Biden
Wall Street Journal Commentary: The central bank has only once changed its policy to help elect a presidential candidate: Nixon in 1972.
We’re Still Paying for the Federal Reserve’s Blunders
Wall Street Journal Op-Ed: Inflation has come down, but prices are still high, and Congress is spending at an unsustainable rate.
China’s Bill Comes Due
No longer a driver of global economic growth, Beijing must confront new risks of its own making. This article by Dr. Levy was published in the Hoover Institution's "defining ideas" series in September 2023.
Fiscal Policy and the Fed Work at Cross Purposes
Multiple forms of stimulus, not captured in the usual measures, run counter to attempts to slow demand and lower inflation. This article by Dr. Levy was published in the Hoover Institution's "defining ideas" series in August 2023.
How to Make a Debt Crisis Even Worse
Wall Street Journal Op-Ed: As Chinese property developers run out of other people's money, cities are making poor decisions.
China Pays for Economic Mismanagement
Wall Street Journal Op-Ed: The bill is coming due for Beijing’s rejection of free enterprise in favor of communist ideals.
The Post-Covid Spending Spree’s Stealthy Economic Stimulus
Wall Street Journal Op-Ed: As the Fed tries to lower inflation, the industrial policies and programs of Bidenomics pump up GDP.