Prof. Kristin Forbes speaks with Reuters reporters Ann Saphir and Howard Schneider about the Federal Reserve’s decision to lower borrowing costs. “It's not one thing that causes everyone to move,” says Forbes. “It's different people focus on different data, different indicators, different risks, and then they all end up in the same place.”
Prof. Kristin Forbes speaks with Associated Press reporter Christopher Rugaber about the Federal Reserve’s announcement declaring the end of the three-year inflation surge. “It really has been a remarkable success, how inflation went up, has come back, and is around the target,” says Forbes. “But from the viewpoint of households, it has not been so successful. Many have taken a big hit to their wages. Many of them feel like the basket of goods they buy is now much more expensive.”
Bloomberg’s David Westin talks with Prof. Kristin Forbes at the Aspen Economic Strategy Group meetings focused on monetary and fiscal policy. Despite progress in the inflation fight, "we as economists forget that this price of a basket of goods matters to people. Things are more expensive," she says.
Prof. Jonathan Gruber speaks with Boston Public Radio hosts Jim Braude and Margery Eagan to explain the relationship between inflation and interest rates. “What’s driving the inflation recently is auto insurance prices,” says Gruber. “Why are insurance prices going up? It actually comes back to the Fed. Auto insurers make a profit in two ways. One is by charging you more than they’ll pay out and the other is investing money and getting rates of return on that money.”
Writing for The Wall Street Journal, Prof. S.P. Kothari and Senior Lecturer Robert Pozen explain why U.S. consumers “continue to feel they are suffering from inflation, although the annual rate of inflation dropped sharply during 2023.” “The answer is that consumers have a broader time horizon,” they write. “[Consumers] are looking at the rate of price increases over the past three years. From January 2021 to January 2024, the consumer price index for all items rose by 17.96%.”
Prof. Emeritus Olivier Blanchard speaks with New York Times reporter Peter Coy about the impact of wage increases on inflation. “Fundamentally, it is hard to believe that when the economy is overheating there is not going to be pressure of some sort on wages and prices,” says Blanchard.
Prof. David Autor speaks with Wall Street Journal reporter Jason Douglas about how there may be another “China shock” due to the influx of goods manufactured in China being made available in foreign markets. “It won’t be the same China shock,” says Autor, adding that “the concerns are more fundamental” as China is competing with advanced economies in cars, computer chips and complex machinery.
Prof. Jonathan Gruber speaks with Boston Public Radio hosts Jim Braude and Margery Eagan to explain the US deficit and its impact on the economy. Gruber says “there are four options to lowering the deficit. The first is to get inflation under control. Second is to ensure a stable and responsible government. Third, is to decrease spending. And the fourth option is to raise taxes.”
Prof. Iván Werning speaks with NPR Planet Money hosts Amanda Aronczyk and Erika Beras about the dollarization of Argentina – an effort being made to address issues within their economy. “One of the big problems of dollarizing is you basically lose the capacity to influence the economy,” says Werning. “So we all hear about the fed in the U.S. lowering rates or raising rates to try and control to minimize recessions. When you dollarize, you give that capacity up.”
Prof. Emeritus Olivier Blanchard speaks with Robert Armstrong of the Financial Times about inflation, the rise in long yields and the fiscal endgame in the U.S. Blanchard urges regulators to, “have plans for a steady reduction of primary deficits to close to zero. Slow, steady, convincing, credible.”
Prof. Iván Werning speaks with New York Times reporter Peter Coy about whether transitioning from pesos to the U.S. dollar could help control inflation in Argentina. Coy writes that Werning prefers “more conventional solutions such as bringing government budgets closer into balance.”
This summer’s heat waves and droughts have brought forth a series of issues including disruption of crop production, further inflation, and electrical issues, reports Colin Lodewick for Fortune. “I think it’s too early to quantify, but I have no doubt that these extreme events are contributing to high prices,” says Sergey Paltsev, deputy director of MIT’s Joint Program on the Science and Policy of Global Change. “In the future, if we don’t change the course of action, it’s going to be worse.”
Institute Prof. Emeritus Peter Diamond speaks with Boston Globe reporter Scot Lehigh about the Fed’s attempts to control inflation. “My message to the Fed would be, yes, we need to cool the economy, but we need to go slowly in doing so, and see how this plays out, because we shouldn’t have confidence in our predictions,” says Diamond.
Prof. Jon Gruber speaks with Boston Public Radio hosts Jim Braude and Margery Eagan about the current state of inflation and what to expect in the future. “I think a gradual increase in interest rates can get us there [combating inflation] without throwing us into a recession,” says Gruber.
Prof. Jonathan Gruber speaks with GBH co-hosts Jim Braude and Margery Eagan about the cause and future of inflation in the United States. “I think that inflation is going to come down because I think people are going to start to run out of this extra money they have been spending, but I don’t think it’s going to come down in the near future anywhere toward the levels it was in the 2000s” says Gruber.