Economic Policy
Video

Economic Policy

Policy Responses to Crises

Lawrence Summers
IMF, 2013
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Editorial Rating

7

Qualities

  • Controversial
  • Eye Opening
  • Visionary

Recommendation

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.

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 the grid, you would expect economic activity not only to rise but to surpass precrisis levels, compensating for what was lost during the downturn. Yet four years after the panic following the 2008 financial crisis subsided, US employment and GDP are still languishing below their...

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.

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