Friends,

This week we look at one of the most hidden of all contributors to widening inequality — macroeconomic policies. Given the current fight over the debt ceiling and the budget deficit, the timing of this class couldn’t be better. Just click on the link below and you’re in.

The questions I’ll focus on are: What’s the effect of macroeconomic policy on inequality? What’s the difference between fiscal and monetary policies? How fast can the economy grow without igniting inflation? How should inflation be remedied? How and under what conditions does faster growth reduce inequality?

Don’t worry if you haven’t had a course in macro. We’ll be approaching the subject from an entirely different direction from standard courses, which rarely if ever explore distributional consequences.

This week’s readings (again, just click on the link):

Monetary Policy:

• Karen Petrou, “Only the Rich Could Love This Economic Recovery,” The New York Times, July 12, 2021

• Rohan Gray, “RIP, Paul Volcker: The Fed Chair Who Thought We Lived Too Well,” The Nation, December 11, 2019

• Sarah Bloom Raskin, “Building a Financial Structure for a More Stable and Equitable Economy,” Federal Reserve, April 18, 2013

Fiscal Policy:

• Chye-Ching Huang, Chad Stone, Katie Windham, and Jennifer Beltran, “Putting the Size of the Needed COVID-19 Fiscal Response in Perspective,” Center on Budget and Policy Priorities, July 24, 2020

• Bittle, Jake, “The Next Austerity Battle Will Be Fought in the States,” The American Prospect, April 8, 2020

• John Cassidy, “The Demand Doctor,” The New Yorker, October 3, 2011