The fiscal-monetary mix in an era of low interest rates
Past Event
The likelihood that interest rates will be lower than historic norms for the foreseeable future and that, in some future economic downturn, the Federal Reserve will again push short-term interest rates to zero raises significant challenges not only for monetary policymakers but to fiscal policymakers as well. Should monetary and fiscal policy be more coordinated when the Fed hits the effective lower bound? How does “helicopter money” actually work? How large a public debt is prudent and optimal in an era of slow growth and low interest rates?
On June 2, the Hutchins Center on Fiscal and Monetary Policy examines these issues with two papers. In one, Federal Reserve Board economists William English, David Lopez-Salido, and Christopher Erceg find that money-financed fiscal expansions – sometimes called helicopter money – can provide a significant boost to an economy but there are risks with this strategy. In the other, Neil Mehrotra of Brown University and the Federal Reserve Bank of Minneapolis analyzes the case that the government can and should borrow more in an era in which inflation-adjusted interest rates are low and economic growth is slow.
Agenda
Introduction
David Wessel
Director - The Hutchins Center on Fiscal and Monetary Policy
Senior Fellow - Economic Studies
Paper: Zero lower bound
Louise Sheiner
The Robert S. Kerr Senior Fellow - Economic Studies
Policy Director - The Hutchins Center on Fiscal and Monetary Policy
Neil Mehrotra
Assistant Professor of Economics - Brown University
Research Economist - Federal Reserve Bank of Minneapolis
Emmanuel Farhi
Professor of Economics - Harvard University
Paper: Helicopter money
Louise Sheiner
The Robert S. Kerr Senior Fellow - Economic Studies
Policy Director - The Hutchins Center on Fiscal and Monetary Policy
William B. English
Professor in the Practice of Finance - Yale School of Management
Former Director of Division of Monetary Affairs - Federal Reserve
David Lopez-Salido
Associate Director of Monetary Affairs - Board of Governors of the Federal Reserve System
Christopher Erceg
Senior Associate Director of International Finance - Board of Governors of the Federal Reserve System
Emi Nakamura
Associate Professor of Business and Economics - Columbia University
Panel
David Wessel
Director - The Hutchins Center on Fiscal and Monetary Policy
Senior Fellow - Economic Studies
Ben S. Bernanke
Distinguished Senior Fellow - Economic Studies - The Brookings Institution
William B. English
Professor in the Practice of Finance - Yale School of Management
Former Director of Division of Monetary Affairs - Federal Reserve
Neil Mehrotra
Assistant Professor of Economics - Brown University
Research Economist - Federal Reserve Bank of Minneapolis
More Information
To subscribe or manage your subscriptions to our top event topic lists, please visit our event topics page.