Editors’ Summary of the Brookings Papers on Economic Activity – 2003 No 1

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 seventy-fifth
conference in Washington, D.C., on March 27 and 28, 2003. This issue of
Brookings Papers on Economic Activity includes the papers and discussions
presented at the conference. The first paper explores why some
emerging market economies are prone to fall into financial crisis at levels
of external indebtedness that more advanced economies, and even some
other developing economies, seem able to manage. The second paper
reviews the current U.S. fiscal situation against the historical record and
finds the present is so different that the past is an unreliable guide to how
either the economy or future policy will respond. The third paper offers a
theoretical analysis of optimal monetary policy in the face of a liquidity
trap, with a focus on the importance of expectations. The fourth paper discusses
a new methodological approach to economic policymaking under
uncertainty, with particular attention to uncertainty about economic models.
The concluding report analyzes whether new rules for corporate
pension accounting promulgated in the 1980s misled investors into overvaluing
the stocks of firms with pension plans during the 1990s market
boom.