Martin Feldstein
Martin Feldstein
Martin Stuart "Marty" Feldsteinis an American economist. He is currently the George F. Baker Professor of Economics at Harvard University, and the president emeritus of the National Bureau of Economic Research. He served as President and Chief Executive Officer of the NBER from 1978 through 2008. From 1982 to 1984, Feldstein served as chairman of the Council of Economic Advisers and as chief economic advisor to President Ronald Reagan. He has also been a member of the Washington-based financial advisory...
NationalityAmerican
ProfessionEconomist
Date of Birth25 November 1939
CountryUnited States of America
We do not understand the links between asset prices, monetary policy, and aggregate demand. We do not understand speculative markets adequately.
A rise in the level of saving can reduce aggregate activity temporarily but only a sustained high level of saving makes it possible to have the sustained high level of business investment that contributes to the long-run growth of output.
And when the dollar decline makes foreign travel much more expensive, I will do more of my vacation traveling in the United States.
My theme this evening is that America needs a competitive dollar.
I think that over the last few decades, we have seen better economic outcomes than in the past.
If the Federal Reserve pursues a strong dollar at home while the dollar becomes more competitive in global markets, we can achieve both price stability and a more balanced path of economic growth.
We are particularly poor at the open economy issues.
It is certainly something to worry about. Continuing to attract funds when the current account deficit is that large and continuing to rise is bound to become a serious problem.
To finance this trade deficit, the U.S. has to borrow from the rest of the world or sell American assets like stocks, businesses, and real estate to the rest of the world.
Today's macroeconomic problems require attention to more fundamental forces of individual incentives and institutional rigidities.
With sound monetary policy, the increases in import prices are offset by lower inflation for domestically produced goods and services.
Why has this improvement in inflation and in the business cycle occurred? I think the answer is better monetary policy, better central banking.
Household saving fell from 2.5 per cent of after-tax income in the third quarter of 2003 to a remarkable minus 1.8 per cent two years later.
We pay some price when necessary to bring down inflation but that price is temporary and is not large relative to the permanent gain from reduced inflation.