We do not understand the links between asset prices, monetary policy, and aggregate demand. We do not understand speculative markets adequately.
More Quotes from Martin Feldstein:
With sound monetary policy, the increases in import prices are offset by lower inflation for domestically produced goods and services.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
I think that over the last few decades, we have seen better economic outcomes than in the past.
Martin Feldstein
A second reason why science cannot replace judgement is the behavior of financial markets.
Martin Feldstein
Today's macroeconomic problems require attention to more fundamental forces of individual incentives and institutional rigidities.
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
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