TrumpEconomics: a First Year Evaluation
Friday, Jan. 5, 2018 10:15 AM - 12:15 PM
- Chair: Dominick Salvatore, Fordham University
The Impact of the Trump Tax Reforms
AbstractAlthough the tax reforms that will be enacted in 2017 are not yet known, I believe they will follow the outline developed by the House Republicans. Even if the four major elements of this tax plan are enacted, it will be too early to know their full impact. My remarks will discuss what I believe will be their likely effects on economic activity, growth and the fiscal deficit. Following are the five likely corporate tax changes: a substantial reduction in the tax rate on corporate profits, a territorial system for taxing offshore profits, a cash flow corporate tax, a border tax adjustment, a special low tax rate for pass through corporations. There will also be a major personal income tax reform, combining lower tax rates with limits on tax deductions and other tax expenditures.
America’s Policy Thinking in the Age of Trump
AbstractWhat is striking in Trumpean economics – supply-side economics too – is the omission of economic growth. There is no awareness that nations at the frontier need indigenous innovation to have ample growth. The take-offs into sustained growth in 19th century Britain and America, later France and Germany, were fueled by dynamism from the grassroots up. Moreover, this stunted economics has no room for the rewards from participating in the economy besides the market wage – for the satisfaction of succeeding at what one is doing, the sense of flourishing as one's career unfolds, and the thrill of venturing into the unknown.
Trump and Globalization
AbstractIn his campaign, Trump proposed to not only impose large tariffs against Mexico and China, but to renegotiate trade agreements. Protectionism was at the core of his agenda. At this juncture, it appears that the post-World War II global economic and political order may be under attack. As we approach the end of the first year of the Trump Administration, the question is: to what extent has he in fact up-ended the old order? What are the consequences? What has (or will) replace it? What will be the effects on living standards in the US and around the world?
Continuing Relevance of Secular Stagnation
AbstractWith the election of Donald Trump, increases in interest rates and stock prices and a possible uptick in growth interest in the secular stagnation hypothesis has waned. I argue this is a misreading of current reality. First, there may well be slack in the economy; Second, there is every reason to believe that neutral real rates have declined on a semi-permanent basis and that this will have major implications for economic performance going forward; Third, the kind of "sugar high" we are now seeing in markets is exactly what we would expect to see if neutral rates had, in fact, declined; Fourth, markets continue to forecast well below target inflation in the industrial world. It bears emphasis that the same arguments used to exempt central banks from responsibility for weak output growth imply that they are responsible for sub-target inflation; Fifth, policy actions around the world are consistent with the idea that there is a global shortfall of aggregate demand even years into the recovery.
- E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
- F4 - Macroeconomic Aspects of International Trade and Finance