Martin Feldstein quotes

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. (Martin Feldstein)

Domestic inflation reflects domestic monetary policy.

Martin Feldstein

The only way that we can reduce our financial dependence on the inflow of funds from the rest of the world is to reduce our trade deficit.

Martin Feldstein

A second reason why science cannot replace judgement is the behavior of financial markets.

Martin Feldstein

The good news is that a competitive dollar in the global market and a strong dollar at home are compatible in both the long run and during the transition to a more competitive dollar.

Martin Feldstein

In short, both experience and economic theory imply that the US could now t to a more competitive dollar without experiencing either increased inflation or decreased economic growth.

Martin Feldstein

Thirty years ago, many economists argued that inflation was a kind of minor inconvenience and that the cost of reducing inflation was too high a price to pay. No one would make those arguments today.

Martin Feldstein

So just as I want pilots on the planes that I fly, when it comes to monetary policy, I want to think that there is someone with sound judgement at the controls.

Martin Feldstein

Increased government spending can provide a temporary stimulus to demand and output but in the longer run higher levels of government spending crowd out private investment or require higher taxes that weaken growth by reducing incentives to save, invest, innovate, and work.

Martin Feldstein

After all, an overvalued dollar gives us the ability to buy foreign goods at lower prices. And the existing volume of exports brings more yen and euros than they would if the dollar were more competitive.

Martin Feldstein

Unless the trade deficit shrinks, the combination of the trade deficit and the interest and dividend payments to foreigners will grow ever more rapidly. (Martin Feldstein)

But because we in the United States finance our current account deficit by borrowing in our own currency, we can move to a more competitive dollar without the adverse effects that followed currency declines in other countries.

Martin Feldstein

First, I think the science of monetary economics has clearly gotten better.

Martin Feldstein

We are particularly poor at the open economy issues.

Martin Feldstein

And finally, no matter how good the science gets, there are problems that inevitably depend on judgement, on art, on a feel for financial markets.

Martin Feldstein

A critical feature of the EU(European Union) in general and EMU in particular is that there is no legitimate way for a member to withdraw... The American experience with the secession of the South may contain some lessons about the danger of a treaty or constitution that has no exits.

Martin Feldstein

Instead of increasing intra-European harmony and global peace, the shift to EMU and the political integration that would follow it would be more likely to lead to increased conflicts within Europe.

Martin Feldstein

But further analysis and experience soon raised doubts about the efficacy of these new tools. Empirical research indicated that the Keynesian multiplier was much smaller than earlier analyses had assumed, reduced by a crowding out of interest-sensitive spending caused by an induced increase in the demand for money and by the effect of the larger national debt on long-term interest rates. The leakage of demand through imports and the effect of the fiscal expansion on the exchange rate further reduced the multiplier.

Martin Feldstein

Although 50 years of European peace since the end of World War II may augur well for the future, it must be remembered that there were also more than 50 year of peace between the Congress of Vienna and the Franco-Prussian War. Moreover, contrary to the hopes and assumptions of Jean Monnet and other advocates of European integration, the devastating American Civil War shows that a formal political union is no guarantee against an intra-European war.

Martin Feldstein

What is clear is that a French aspiration for equality and a German expectation of hegemony are not consistent.

Martin Feldstein

The economic policy issues that we debate today-trade policy, inflation, the proper role of government, the eradication of poverty, and the means of raising the rate of economic growth-have been discussed by economists for more than two centuries. Many of today's economic policies-both the good ones and the bad-are the result of the ideas of those past economists. And many of today's debates about economic policy can be understood only by those who have at least some familiarity with the ideas of earlier economists.
The giants of economic science during the past two hundred years have been men concerned with the critical policy issues of their time. They studied the working of the economy in order to advocate better economic policies. But despite their concern with policy, they were not polemicists or politicians but men who sought to persuade their contemporaries in government and in the broader public by analysis and evidence that would meet the standards of professional debate. (Martin Feldstein)

Thanks to the work of John Maynard Keynes and of Milton Friedman, we now have a better understanding of how governments can (at least in principle) reduce the severity of major economic downturns. Keynesian economics taught us that government spending can raise GDP and reduce unemployment.

Martin Feldstein

Although economists have studied the sensitivity of import and export volumes to changes in the exchange rate, there is still much uncertainty about just how much the dollar must change to bring about any given reduction in our trade deficit.

Martin Feldstein

Homeowners who refinanced their mortgages took out cash and reduced their monthly payments at the same time. Much of the cash obtained by refinancing was spent on consumer durables, home improvements and the like.

Martin Feldstein

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.

Martin Feldstein

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