J. Bradford DeLong

The Fed should buy recessioninsurance

BERKELEY – The next global downturn may still be a little way off. The chances that the North Atlantic as a whole will be in recession a year from now have fallen to about one in four. German growth may well be positive this quarter, while China could rebound, too. And although US growth is...

Sunday, March 17, 2019, 11:56 PM

What will cause the next US recession?

BERKELEY – Over the past 40 years, the US economy has experienced four recessions. Among the four, only the extended downturn of 1979-1982 had a conventional cause. The US Federal Reserve thought that inflation was too high, so it hit the economy on the head with the brick of interest-rate...

Tuesday, January 8, 2019, 12:00 AM

Blame the economists?

BERKELEY– Now that we are witnessing what looks like the historic decline of the West, it is worth asking what role economists might have played in the disasters of the past decade. From the end of World War II until 2007, Western political leaders at least acted as if they were interested...

Sunday, November 4, 2018, 11:57 PM

Self-fulfilling financial crises

BERKELEY – The 2008 financial crisis and subsequent recession left the Global North 10 per cent poorer than it otherwise would have been, based on 2005 forecasts. For those hoping to understand this episode better, I have long recommended four books, in particular: Manias, Panics, and...

Monday, October 15, 2018, 9:27 PM

For whom the climate bell tolls

BERKELEY – Scarcely had I begun my first lecture of the fall semester here at the University of California, Berkeley, when I realised that I was too hot. I desperately wanted to take off my professorial tweed jacket. A tweed jacket is a wonderful but peculiar costume. If all you have for raw...

Friday, September 7, 2018, 10:39 PM

Why low inflation is no surprise

The persistence of low inflation in developed countries in recent years has confounded central bankers and economic policymakers, because they believe that declining unemployment should drive up aggregate demand, and thus prices. But what if many of the assumptions underlying the conventional...

Thursday, January 4, 2018, 12:00 AM

America's broken system

BERKELEY – The tax bill that US Republicans have doggedly pushed through Congress is not as big a deal as many are portraying it to be. It is medium-size news. The big news – the much more weighty and ominous news – lies elsewhere. Of course, medium-size is not nothing. If the...

Friday, December 8, 2017, 12:00 AM

Where US manufacturing jobs really went

BERKELEY – In the two decades from 1979 to 1999, the number of manufacturing jobs in the United States drifted downward, from 19 million to 17 million. But over the next decade, between 1999 and 2009, the number plummeted to 12 million. That more dramatic decline has given rise to the idea...

Thursday, May 4, 2017, 12:00 AM

Artificial intelligence and artificial problems

BERKELEY – Former US Treasury Secretary Larry Summers recently took exception to current US Treasury Secretary Steve Mnuchin’s views on “artificial intelligence” (AI) and related topics. The difference between the two seems to be, more than anything else, a matter of...

Tuesday, April 4, 2017, 12:00 AM

Would higher interest rates boost US growth?

BERKELEY – Blackstone CEO Tony James recently published a column in the Financial Times titled “To revive America’s economy, raise interest rates.” This is a very bad idea. Let us imagine that we have been transported to a parallel universe, one where the US Federal Reserve...

Monday, October 31, 2016, 12:00 AM

Which thinkers will define our future?

J. Bradford DeLong BERKELEY – Several years ago, it occurred to me that social scientists today are all standing on the shoulders of giants like Niccolo Machiavelli, John Locke, Adam Smith, Alexis de Tocqueville, Max Weber, and Émile Durkheim. One thing they all have in common is that their...

Wednesday, June 29, 2016, 12:00 AM

Rescue helicopters for stranded economies

J. Bradford Delong BERKELEY – For countries where nominal interest rates are at or near zero, fiscal stimulus should be a no-brainer. As long as the interest rate at which a government borrows is less than the sum of inflation, labor-force growth, and labor-productivity growth, the...

Monday, May 2, 2016, 12:00 AM

Pragmatism or perdition

J. Bradford DeLong BERKELEY – It is almost impossible to assess the progress of the United States economy over the past four decades without feeling disappointed. From the perspective of the typical American, nearly one-third of the country’s productive potential has been thrown away on...

Wednesday, March 2, 2016, 12:00 AM

The tragedy of Ben Bernanke

BERKELEY – It is difficult to read former US Federal Reserve Chair Ben Bernanke’s new memoir, The Courage to Act, as anything other than a tragedy. It is the story of a man who may have been the best-prepared person in the world for the job he was given, but who soon found himself...

Saturday, October 31, 2015, 12:00 AM

A cautionary history of US monetary tightening

J. Bradford Delong BERKELEY – The US Federal Reserve has embarked on an effort to tighten monetary policy four times in the past four decades. On every one of these occasions, the effort triggered processes that reduced employment and output far more than the Fed’s staff had anticipated. As...

Monday, August 31, 2015, 12:00 AM

Why small booms cause big busts

J. Bradford DeLong BERKELEY – As bubbles go, it was not a very big one. From 2002 to 2006, the share of the American economy devoted to residential construction rose by 1.2 percentage points of GDP above its previous trend value, before plunging as the United States entered the greatest...

Tuesday, June 23, 2015, 12:00 AM

The monetarist mistake

BERKELEY – Ideas matter. That is the lesson of Hall of Mirrors, the American economist Barry Eichengreen’s chronicle of the two biggest economic crises of the past 100 years: the twentieth century’s Great Depression and the ongoing Great Recession, from which we are still...

Tuesday, March 31, 2015, 12:00 AM

Making do with more

J. Bradford DeLong BERKELEY – In the United States, just three out of ten workers are needed to produce and deliver the goods we consume. Everything we extract, grow, design, build, make, engineer, and transport – down to brewing a cup of coffee in a restaurant kitchen and carrying it to a...

Tuesday, March 3, 2015, 12:00 AM

Try everything

J. Bradford Delong Berkeley – When it became clear in late 2008 that the global economy was headed toward a crash at least as dangerous as the one that had initiated the Great Depression, I was alarmed, but also hopeful. We had, after all, seen this before. And we also had a model for how to...

Monday, January 5, 2015, 12:00 AM

Try everything

J. Bradford DeLong Berkeley – When it became clear in late 2008 that the global economy was headed toward a crash at least as dangerous as the one that had initiated the Great Depression, I was alarmed, but also hopeful. We had, after all, seen this before. And we also had a model for how to...

Friday, January 2, 2015, 12:00 AM