THE BROOKINGS PANEL on Economic Activity held its sixty-seventh
conference in Washington, D.C., on March 25 and 26, 1999. This issue of
Brookings Papers includes the papers, reports, and discussions presented
at the conference. The first paper undertakes an eclectic analysis of trends
and developments in the U.S. labor market, in search of clues to explain the
current propitious coincidence of low unemployment and falling inflation.
The second paper inquires whether, in the wake of recent currency crises
in developing economies, economists and policymakers should reconsider
their endorsement of capital account liberalization and concede, for some
countries, a useful role to official restrictions on capital inflows. The first
report examines a fundamental question raised by the recent crises, namely,
what contribution foreign capital inflows make to developing economies.
The second report provides some new perspectives on the supposedly
anemic U.S. saving rate by considering several conceptual adjustments to
official saving measures, including the effect of capital gains on household
wealth. The concluding report asks whether, after decades of concern about
inflation, a bout of deflation may now be in our future, and if so, whether
it poses special problems for stabilization policy.