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Martin Feldstein QUOTES / QUOTATIONS
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.
Quotation of Martin Feldstein
A second reason why science cannot replace judgement is the behavior of financial markets.
Quotation of 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.
Quotation of 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.
Quotation of Martin Feldstein
An increase in the relative price of products from the low wage manufacturers in Asia and Latin America will also make those products less attractive to American consumers.
Quotation of 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.
Quotation of Martin Feldstein
And when the dollar decline makes foreign travel much more expensive, I will do more of my vacation traveling in the United States.
Quotation of 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.
Quotation of Martin Feldstein
But the primary reason for wanting the dollar to become more competitive in the near future is that we may need an increase in exports this year and in 2007 to sustain the economy's current pace of expansion.
Quotation of Martin Feldstein
But then in April of 1985 the dollar began a sharp decline. The dollar's trade weighted value fell 23 percent in just 12 months and by a total of 37 percent by the beginning of 1988.
Quotation of Martin Feldstein
But, third, science cannot replace judgement because there are too many things that we simply do not understand.
Quotation of Martin Feldstein
Domestic inflation reflects domestic monetary policy.
Quotation of Martin Feldstein
Even if the dollar does decline during the coming months, the delays in the response of exports and imports to the more competitive dollar will mean that the increase in aggregate demand from this source may not happen for a year or more.
Quotation of Martin Feldstein
First, I think the science of monetary economics has clearly gotten better.
Quotation of 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.
Quotation of Martin Feldstein
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.
Quotation of Martin Feldstein
I think that over the last few decades, we have seen better economic outcomes than in the past.
Quotation of 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.
Quotation of 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.
Quotation of 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.
Quotation of Martin Feldstein
Inflation is lower and more stable and the real business cycle fluctuations are more modest.
Quotation of Martin Feldstein
My theme this evening is that America needs a competitive dollar.
Quotation of Martin Feldstein
Of course, everything is not perfect. We see high unemployment and low productivity growth, but these are (as previous speakers have emphasized) the result of poor structural policies rather than inappropriate monetary policy.
Quotation of Martin Feldstein
Refinancing allowed households to take out cash to spend on other things while also reducing their monthly mortgage payments.
Quotation of 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.
Quotation of Martin Feldstein
The decline of the overvalued dollar in the 1980s also had no adverse effect on economic activity in the United States.
Quotation of 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.
Quotation of Martin Feldstein
The household saving rate has been falling since the early 1990s, declining from 7 percent in 1990 to just 2.4 percent in 2002.
Quotation of Martin Feldstein
The key to the economy's strength in 2004 and 2005 was that household saving declined dramatically while the price of oil rose.
Quotation of Martin Feldstein
The more competitive value of the dollar turned around the trade deficit.
Quotation of 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.
Quotation of Martin Feldstein
The price of imported oil in the US doubled between summer 2003 and summer 2005, reducing consumers' purchasing power by more than 1 per cent of gross domestic product.
Quotation of 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.
Quotation of Martin Feldstein
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.
Quotation of Martin Feldstein
Today's macroeconomic problems require attention to more fundamental forces of individual incentives and institutional rigidities.
Quotation of 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.
Quotation of Martin Feldstein
We also do not understand why long-term rates have not increased while the Federal Reserve has been raising short-term rates.
Quotation of Martin Feldstein
We are particularly poor at the open economy issues.
Quotation of Martin Feldstein
We do not understand the links between asset prices, monetary policy, and aggregate demand. We do not understand speculative markets adequately.
Quotation of Martin Feldstein
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.
Quotation of Martin Feldstein
Why has this improvement in inflation and in the business cycle occurred? I think the answer is better monetary policy, better central banking.
Quotation of Martin Feldstein
With sound monetary policy, the increases in import prices are offset by lower inflation for domestically produced goods and services.
Quotation of Martin Feldstein