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.
More Quotes from 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.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
Today's macroeconomic problems require attention to more fundamental forces of individual incentives and institutional rigidities.
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
With sound monetary policy, the increases in import prices are offset by lower inflation for domestically produced goods and services.
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
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