Edward Harrison — Some thoughts on full employment and this asset-based economic recovery

My answer is that monetary policy is the only game in town. In fact, if you look at the US compared to the rest of the G-7, fiscal policy has been tighter in the US than in any other country. It’s been even tighter than Spain, which has been forced to cut under the EU’s excessive deficit procedure.

Credit Writedowns
Some thoughts on full employment and this asset-based economic recovery
Edward Harrison

This is going to be a quick follow-on to the last post on monetary policy as the only game in town. I feel like the obvious question that post doesn’t answer is this one: what other policy tools should we use? And I want to tee up that question with this post.

Understanding what a neutral macro-economic policy looks like