Martin Feldstein
12 quotes
Biography
"The legacy of Keynesian economics — the misdiagnosis of unemployment, the fear of saving, and the unjustified faith in government intervention — affected the fundamental ideas of policy makers for a generation and altered such basic institutions of our economy as the tax laws, the social insurance programs and the financial system. Changing these deeply ingrained aspects of economic life can happen only slowly. But the economics profession has undoubtedly begun to re-examine and re-evaluate the Keynesian notions that have been so dominant for the past 35 years. There is a return to older and more basic economic truths and an attempt to adapt these ideas to the changing conditions of technology and affluence. From this is emerging a new view of unemployment, of saving, and of the role of government."
"Instead of increasing intra-European harmony and global peace, the shift to EMU and the political integration that would follow it would be more likely to lead to increased conflicts within Europe."
"What is clear is that a French aspiration for equality and a German expectation of hegemony are not consistent."
"A critical feature of the EU(European Union) in general and EMU in particular is that there is no legitimate way for a member to withdraw... The American experience with the secession of the South may contain some lessons about the danger of a treaty or constitution that has no exits."
"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."
"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."
"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."
"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."
"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."
"A second reason why science cannot replace judgement is the behavior of financial markets."
"First, I think the science of monetary economics has clearly gotten better."
"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."