Chapter 3: A Better Solution for Reducing Inflation
The Federal Reserve could attempt to fix inflation by replaying what it did in the 1980s, which resulted in two bruising recessions. But as Cochrane points out, raising interest rates will also raise interest costs on the federal government’s debt. The solution, Cochrane explains, is to fix the structural problems in the United States by coordinating monetary and fiscal policy, deregulating the economy, and simplifying tax laws.
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Click below to watch the other videos in this series.
Chapter 1: • Chapter 1: Fiscal Poli...
Chapter 2: • Chapter 2: Fiscal Poli...
Chapter 3: • Chapter 3: Fiscal Poli...
Additional resources:
Read “Fiscal Histories,” by John Cochrane. Available here. static1.squarespace.com/stati....
Listen to “What ‘Is’ Is: John Cochrane on Recessions, Inflation, the Fed, Debt and ‘Green Pork,’” with Bill Whalen and John Cochrane. Available here. www.hoover.org/research/matte....
Read “Inflation and Monetary Policy,” via Policy Insights by PolicyEd. Available here. www.policyed.org/policy-insig....
Read “The ‘Shrink the Economy’ Act,” by David Henderson. Available here. www.hoover.org/research/shrin....
Read “It’s Time to Get Back to Rules-Based Monetary Policy,” by John Taylor. Available here. www.hoover.org/research/its-t....
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