Summary of Economic Policy

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Economic Policy summary
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Economist Lawrence Summers is not backward in coming forward. His lecture delivers a bold – though cryptic – message: He posits the prospect of ongoing “secular stagnation.” Summers questions whether current fiscal and monetary policies are sufficient, or even appropriate, to generate the jobs and growth that would propel a recovery. His ideas aren’t wholly novel, but, considering Summers’s position as a member of the economic establishment, his frank views are refreshing. getAbstract recommends his noble effort to question current US economic policy.

In this summary, you will learn

  • Why employment and growth are below expectations years after the 2008 financial crisis,
  • How “secular stagnation” may explain that phenomenon, and
  • Why near-zero nominal interest rates and monetary easing may become the norm.
 

About the Speaker

Lawrence Summers was director of President Obama’s National Economic Council until 2010. His previous positions include US Treasury secretary, president of Harvard University and chief economist of the World Bank.

 

Summary

Consider a hypothetical failure of the power grid: Production would come to a standstill. Likewise, without the intermediary services of a functioning financial system during a financial crisis, business and trade become impossible. However, once the financial panic passes, or electricity returns to...

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