Editors’ Summary of the Brookings Papers on Economic Activity – 2000 No 2

George L. Perry and

George L. Perry Senior Fellow Emeritus - Economic Studies

William C. Brainard

WCB

William C. Brainard

THE BROOKINGS PANEL on Economic Activity held its seventieth
conference in Washington, D.C., on September 7 and 8, 2000. This issue
of Brookings Papers on Economic Activity includes the papers and
discussions presented at the conference. The first paper analyzes the
effects on national saving of alternative proposals for Social Security
reform and how these effects depend on what policy rule governs the
overall budget. The second paper proposes that the sharp rise in the stock
market in recent years reflects increases in intangible and unobserved
“e-capital.” The third paper reviews recent developments in real estate
markets and assesses the risk of a crisis in the sector. The next three papers
address various implications of the unexpected emergence of federal
budget surpluses and the consequences of sharply declining government
debt. The first of these examines the effect of improving fiscal balances in
most major industrial countries on the level and term structure of interest
rates. The next considers the effects of declining government debt on the
efficiency and liquidity of financial markets and the future conduct of
monetary policy. The third asks whether a reduced stock of debt will
impair the government’s ability to implement optimal fiscal policy. Finally,
the seventh paper in this issue examines to what extent official corruption
inhibits foreign direct investment in developing countries.