Why a Soft Landing Is So Hard
Chicago Booth’s Raghuram G. Rajan describes the task ahead for the US Federal Reserve.
Why a Soft Landing Is So HardJosh Stunkel
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Hal Weitzman: The world’s industrialized economies appear to be in recovery mode. After 2 percent growth last year, some expect the US economy to expand by as much as 3 percent this year. The Japanese economy seems finally to be reviving, while in Europe, former basket cases Ireland and Portugal have returned to the debt markets. Even Greece is saying it could issue sovereign bonds this year.
But there are several large clouds accompanying this silver lining. There’s concerns about deflation, persistent and rising inequality, falling productivity, and low labor-force participation rates. The recovery since the financial crisis has been decidedly weak. Some observers say that what recovery there has been is largely due to the fuel of central-bank support, others, that we are in an era of secular stagnation in which savers outweigh investors.
So can the US and other industrialized economies return to their precrisis growth rates, or are we witnessing a new normal of slower economic expansion?
Welcome to The Big Question, the monthly video series from Capital Ideas at Chicago Booth. I’m Hal Weitzman, and with me to discuss the issue is an expert panel.
Erik Hurst is the V. Duane Rath Professor of Economics and the John E. Jeuck Faculty Fellow at Chicago Booth. An expert on housing markets, labor markets, and household financial behavior, he’s also served as an advisor to the Federal Reserve Bank of Chicago. He’s the recipient of several awards, including most recently, the Ewing Marion Kauffman Prize Medal for distinguished research in entrepreneurship.
Anil Kashyap is the Edward Eagle Brown Professor of Economics and Finance at Chicago Booth and a faculty director of the Initiative on Global Markets. He’s also an advisor to the Federal Reserve, the IMF, the Congressional Budget Office, and the Swedish Central Bank.
And Harald Uhlig is a professor of economics and former chair of the economics department at the University of Chicago. He’s an expert on, among other things, the intersection of macroeconomics and financial economics. As well as his work at the University of Chicago, he’s also a guest researcher at the Bundesbank and head editor of the Journal of Political Economy.
Panel, welcome to The Big Question.
Erik Hurst, let me start with you. When we say secular stagnation, what does that actually mean?
Erik Hurst: We usually talk about it as it means an overall lack of demand in the economy. It used to be, about 20, 30 years ago, talking about the decline in population in the US, and when there’s less people, there’d be less demand for products, and firms wouldn’t have to produce as much.
I think people are talking about it now more in the sense that we used to talk about an old liquidity trap, that real interest rates in the economy need to be lower than they are now. And the Fed Reserve is bound by interest rates at zero, so interest rates are higher than they should be, and as a result we can’t get enough jump-starting of the economy.
Hal Weitzman: OK, and Anil Kashyap, how serious a concern is secular stagnation?
Anil Kashyap: Well, for the US, I don’t think it’s looking terribly good because it looks like we’re finally gonna start growing. If you looked at the normal patterns in a recovery, you’d say, well, we’re four years into this recovery, it’s about time for another recession. And lately the growth has actually looked pretty good. Probably looks better this coming year than it has in any of the last three or four, so I’m guessing a year from now we won’t be talking about secular stagnation in the United States.
Hal Weitzman: And Harald Uhlig, if we shouldn’t worry about secular stagnation in the US, at least not this year, what about in Europe?
Harald Uhlig: Well, Europe is not out of trouble yet. The situation in Europe looks better, but unemployment is still extremely high in Spain. We’re talking about above 25 percent. Youth unemployment is about 50 percent. Greece is certainly not out of trouble, so the eurozone still looks very fragile. And it’s an interesting question of how to go forward when there’s a good scenario and there’s a bad scenario. And I think the . . . we need to be talking about both.
Hal Weitzman: OK, well, sketch them out very briefly for us then.
Harald Uhlig: Well, the good scenario is that things work themselves out, that somehow labor-market reforms start to kick in in Spain, Greece, that maybe global demand picks up. Unemployment comes down, maybe the banks become healthy again. The single-resolution mechanism is finally bringing peace and quiet to the financial system. Everything maybe in three, four years quiets, by largely forgotten. It’s entirely possible.
It’s also possible that the eurozone quiet flares up again, that investors in these government bonds think once again that maybe fiscal plans in Spain are not sustainable, that maybe there’s gonna be more talk again about exiting the eurozone or break up of the eurozone. It could happen that the German constitutional court steps in and says certain policies by the ECB, particularly the OMT, are unconstitutional and that the ECB has to retrench. And who knows? We might be back in the storm.
Maybe what we are seeing is just the eye of the storm passing us by and it looks nice and quiet, but maybe the second hurricane is coming.
Hal Weitzman: So those expectations that this was gonna be the year that eurozone got back on track, you are not convinced yet?
Harald Uhlig: Not convinced. Somewhat cautiously optimistic, yes, but you look at the statistics in these countries. They’re not in good shape by any stretch of the imagination.
Hal Weitzman: OK. Well, you mentioned employment. I wanna come back to the US. Erik Hurst, you’re an expert on US employment trends, what are we seeing here? What are the, kind of, the secular trends here in the US?
Erik Hurst: I think what I’m most worried about going forward is the very low employment-to-population ratio we’ve seen in the US. We had this big decline in the fraction of people working and it has not rebounded at all since the recession has finished. So even though we’re growing at 2–3 percent per year coming out of the recession, we’ve not seen large employment gains measured by the employment-to-population ratio.
And it’s kinda very . . . the inequality you see across people with skill and without skill shows up strongly in the employment numbers. So for workers with less than a college degree, they have seen very little gains in employment. The employment-to-population ratio fell and hasn’t rebound much, but for those with a college degree or more, we’re kinda right back on trend where we were prior to the recession.
So you see this kind of divergence going forward, and I don’t see anything on the horizon that’s gonna tell me that’s gonna change, if it hasn’t started changing already.
Hal Weitzman: So you see the kind of low participation rates in the labor forces being something that’s gonna be with us for a long time?
Erik Hurst: I think part of it is gonna be with us for a long time.
Hal Weitzman: Does that mean people who lost their jobs during the downturn may never work again?
Erik Hurst: Older ones, those might not work again. We’re seeing big uptakes in the disability roles, and I think the younger workers adjust. Young generations tend to be much more elastic than older generations, but these older workers who kinda got displaced during the recession, I think there might be periods of time where they might remain out of the labor force for a persistent period of time.
Hal Weitzman: And what effect is that gonna have on US growth in the longer term?
Erik Hurst: Again it’s related to the inequality questions that you hear people popping up and talking about going forward, that there’s gonna be a group of people where the economy’s gonna be chugging along, 2, 3 percent going forward. Some are gonna get more of the gains, and others are gonna get less of the gains.
Hal Weitzman: So to you it’s less a question about the actual number of growth and more about how it distributes.
Erik Hurst: More about the distribution.
Hal Weitzman: And inequality is a kind of a global concern, right? Anil Kashyap, is that really affecting the global economy?
Anil Kashyap: Well maybe, but I think . . . Erik didn’t say anything that I disagree with, but the usual debate over inequality is smearing together very different things. There’s some people that are ranting, you got the top 1 percent, and that’s got to do with globalization. And there’s lots of reasons why the most talented people in all industries are making more money now than they ever have before. That’s completely separate from all the problems that happen if you’re unmarried and have a kid without graduating from high school. I think those are really rather different problems, but those are the two extremes.
And then in the middle, you’ve got somewhat different dynamics going on as well, and so this question about how the overall strength of the economy plays into these three different groups, I think is very different.
Hal Weitzman: But there is a question, isn’t there, about the middle class, particularly in industrialized countries and the kind of stagnation and incomes in the middle class?
Anil Kashyap: Yeah, although there was some very recent work that was released just last week by [Harvard’s] Raj Chetty and [University of California at Berkeley’s] Emmanuel Saez that got the most comprehensive look anybody’s had at actual mobility, including for the middle class, and those numbers kinda suggested that if you were just looking at the broadest trends, at least between the people coming into the workforce in the early 1970s and then all the way until the late 1980s, outcomes looked pretty similar. Now maybe you aren’t happy with the overall amount of mobility, but the narrative that it’s impossible to get into the middle class or to get from the middle class into the upper classes just doesn’t look like it’s in the data.
Erik Hurst: Related to that, there’s a lot of work showing about a hollowing out of the skill distribution in the US, that jobs that we used to do, we just don’t do as much anymore. Some people call them routine jobs. You could say manufacturing jobs is a big piece of these routine jobs, and those jobs are just less prevalent than they were before, and people would associate some of these jobs as being part of middle-class jobs, and you’ve seen that missing part of the skill distribution.
So you have people, bartenders are doing relatively well. You have college professors doing relatively well, but there’s kind of in the middle there seems to be a missing mass of workers, and I think that’s the kind of thing that I’ve been thinking about. In my own work related, David Autor at MIT has some stuff, kinda showing about this decline in routine jobs in the US—whatever you call it, manufacturing, routine—and how that’s had effects on certain skill groups more than others and I think that’s . . . I don’t see any way to get around some of those issues.
Hal Weitzman: Harald Uhlig?
Harald Uhlig: I believe that inequality’s actually an important ingredient for strong growth. You see, if there are jobs out there that pay millions, tens of millions of money, that ignites dreams in people. That ignites dreams in young people, and that’s what we want. We want young people to dream. You want them to dream that they can change the world, that they can make it big. That they go after in creating a new company, maybe creating new movies, creating new songs, creating that new product that Wall Street sells to the world. And it’s these dreams that power people in becoming a creative entrepreneur and going out there and trying stuff, even if they fail.
People routinely overestimate how successful they can be. Everybody plays on his piano and thinks he’s gonna be the next pop star, but lots of people are trying, a few make it big time, and that’s what drives industry.
If you look at China, lots and lots of people are dreaming. China has permitted more of a market economy now. There’s quite a middle class in China, and they want their children to be the world movers of the future. They send them to the best universities, and so forth. They want them to be successful. So China has discovered inequality, and I think we should cherish inequality in America.
Hal Weitzman: Really, so you think inequality is actually a powerful force for growth?
Harald Uhlig: Absolutely, yes.
Hal Weitzman: Erik Hurst?
Erik Hurst: You always wanna have people have the right incentives to kinda innovate or invest in some sort of productive capacity.
The thing that people kind of fixate a little bit more now when they’re talking about inequality, at least the way I’ve been thinking about inequality is whether people have the skills to do some of those tasks that has the high rewards. So is there a matching between the skill composition of the workforce and the skills which are needed to get some of those high returns. So you want both. You wanna have high returns to encourage innovation, but you also want the composition of the workforce to be able to have the skills to innovate, and I think that’s kind of where we’re seeing some of the mismatch today.
The top of the distribution—or when I say top, it doesn’t mean 1 percent or so. We’re doing quite well. People are innovating and coming up with products, but you’re seeing a tremendous amount of sluggishness, at least in employment, for people with high-school degrees or less. Or even a little bit of some college, but not a college degree.
Hal Weitzman: Anil Kashyap, let me ask you about monetary policy. How important are central banks to the growth, to kind of, fledgling growth that we’ve seen last year and this year so far?
Anil Kashyap: Wel,l I think they’re reaching the limits of what they can do. We’re five years past the recession. Most theories would say at some point the monetary effects start to die out, and that the supply side of the economy becomes more important. The longer the horizon, by the time you’re talking 10, 15 years, nobody thinks monetary policy can stimulate an economy for that long, so we’re halfway there.
And I think we’re seeing some of these economies are kinda slumping back into the same bad situation that they had a year or two before the crisis. If you look at . . . one indicator is the IMF’s assessment of what countries needed to do to grow, and one thing that’s very disheartening is if you took what the IMF was saying to Italy, France, Spain in 2003 and look at what they’re telling them in 2013, it’s the same. Cut and paste. And so that’s pretty discouraging because the challenges are much harder now to implement the reforms that they wouldn’t do when the sun was shining.
Hal Weitzman: What do you make of Japan? Is your next bit on Japan? It seems there that loose monetary policy is having some effect in helping . . .
Anil Kashyap: Yeah, but it’s mostly just affecting inflation. They’re about to raise taxes in Japan. We’ll see how the economy does after that, but the famous third arrow isn’t even out of the quiver. It looks like the third arrow’s a bluff.
Hal Weitzman: You’re talking about structural reform?
Anil Kashyap: Yeah, so Mr. Abe said we need massive fiscal stimulus, we need loose monetary policy, and then we need structural reform. So he’s done the fiscal stimulus, he’s done a little bit of . . . and he’s done the monetary policy now, but the big rewards will come from reforming the economy and kind of shaking them out of the malaise. Making it easier to create businesses, creating easier times to hire workers, and for people to get training, and so on, and that’s just stagnated, nothing.
Hal Weitzman: Harald Uhlig, is that a similar problem in Europe? Is it the failure to actually put in place the reforms that’s the Achilles’ heel?
Harald Uhlig: I think Spain and Greece and Italy, they had it so good for so many years that there was little necessity to do much, and the housing market boomed, and people were buying properties. Look at Barcelona now and compare to how it looks 10 years ago, what a change, what a city. And so, they had a big party and I don’t blame them. Things were good, and the party has come to an end, and now they have to get out of this. And if you look at competitive numbers for Italy for example, they looked . . . looks like Italian wages are 20 percent too high, so something has to happen on the labor market there, but it seems to me they are still, they’re having great difficulties even making a start on this, and there’s a big disagreement among the parties and they still think they can shift the problem elsewhere. So I think they will probably carry these problems forward for quite some time.
Hal Weitzman: Erik Hurst?
Erik Hurst: Yeah, so one of the things we usually think of that Harald referred to earlier is having a flexible enough economy so people with the innovations, their skills as a pop star or their skills as a banker could translate that easily. And you want it both on the worker side and the firm side, and I think one way that the US is in a better shape than Europe on this is that the labor market is pretty flexible. There’s not a lot of cost to hiring, there’s not a lot of cost to firing, and that makes us a little bit more flexible relative to Europe.
The thing we can be concerned about is making sure we don’t go down a path in the US where you have some of this inequality and you wanna treat the inequality to the extent that it’s there in a way that doesn’t discourage people’s ability to work.
Hal Weitzman: Harald Uhlig?
Harald Uhlig: And I think that’s an excellent, really important point, and it’s . . . when you can think about Europe again, why Germany for example always looked to the US labor market and said how can we bring unemployment down. Unemployment was persistently high in Germany. Germany was considered the sick man of Europe, and so they looked to the US experience and looked to the Danish experience and reformed the labor market. The Schröder government reformed the labor market. It was a big reform. It was a very painful reform. Right? The social democrats lost the elections over that. They broke up as a party. Politically, it was enormously costly, but Germany’s now bearing the fruits of that reform. Germany’s doing well I would say within Europe, and some of these other countries because there was much less of a need, and it didn’t introduce a flexibility, so hopefully many of these other countries learn and have to go through painful labor-market reforms. I think there’s no way around it, and getting more of that flexibility that the US has.
Hal Weitzman: Anil Kashyap?
Anil Kashyap: Yeah, while I totally agree that the Schröder reforms were vastly underestimated at the time as to how well they set the stage for German growth over the last six, seven years. And Germany sticks out. It’s growing. It’s recovered to where it was before the crisis. There’s a lot of momentum there, optimism and all that.
And I think when Mrs. Merkel talks about what she means by austerity, she means doing the hard things. Having the hard conversations, making people be accountable and so on, in a way that the Germans actually did.
Now the side to that was the Germans had a lot of fiscal stimulus at the time they were doing it, so they blew through the budget deficit thresholds that they were supposed to avoid. And I think that was a good trade, and I would hope that the Germans at this point would say to Italy and Spain: if you actually do reform, we’ll let you off the hook on what your budget deficits might look like during the short period while you’re enacting reforms.
Hal Weitzman: What are some of the policies that might work in terms of global growth, I mean, structural reforms is one. What are some of the other things that governments could do that might help some of these problems that you’ve raised?
Anil Kashyap: Well, the structural reforms is kind of like the catch-all for everything, but things that make it easier to form businesses, things that make it easier to grow a business. In a lot of these countries, they have size-based regulation where you get to 20 workers or 50 workers, you’re subject to a whole host of rules so guess what, no one wants to grow.
But we know small firms are massively less efficient than larger firms. And so collecting taxes in a more reasonable way so that you can’t evade taxes by staying small, and have more equitable tax rates because you collect from everybody.
Hal Weitzman: OK, and Erik Hurst, you talked about the labor market in the US and inequality in the US. What would you like to see done to address those concerns?
Erik Hurst: The big issue I think with the US is that the labor market is very flexible and most of these . . . the thing is there’s a skill mismatch for where the jobs we’ve been moving to and some of the skills the workers have to fill those jobs and how you promote human capital among a population, particularly when there’s already a return to skill, that’s pretty big. You could get a lot of return from going to college or trying to be a pop star, and if people aren’t responding to those, how do you do it? That’s above my pay grade, but I know many of my colleagues, our colleague Jim Heckman over in the economics department, thinks hard about how you promote human capital even within the US, and not a lot of levers have big payoffs at this time that people have stumbled across.
Anil Kashyap: It’s partly also because it’s a big social problem. If you look at the bottom end of the labor-market outcomes and income distribution, they have four or five pathologies that have all gone wrong. You don’t have two parents in homes. You have people that are undereducated. You have people that don’t have consistent work histories. They probably don’t have good medical care. Maybe that’s gonna get finally fixed. They’re like one shock away from having their lives unravel, and it’s not gonna be something simple to turn that around.
Erik Hurst: One program that I do think we need to revisit at some point is the disability program. There’s been a lot of evidence over the last 15 years or so that it is a margin of substitution when labor markets get weak, and the thing about the disability program relative to other labor-market subsidiary programs—we have the unemployment insurance—it tends to be permanent. Very few people ever exit from disability back into work, and to the extent that people are using it as a marginal insurance for business cycle variation, I think we might need to think about ways to strengthen that.
Harald Uhlig: My good colleague Casey Mulligan over in the economics department claims that all the various programs and added taxes and then extending unemployment benefits and so forth and so forth, it maybe contributed half of what we see in terms of the unemployment numbers. It has doubled the severity of the crisis. No one maybe can quibble with the numbers, and there’s been a big debate about this, but . . .
Hal Weitzman: Are there just too many incentives not to work?
Harald Uhlig: Exactly. I think we ought to take a harder look at these and not just say, we gotta help these people, so let’s do one program after the other. Oh, another crisis, even deeper, now let’s do another program. But rather maybe we change and really think hard whether these programs are really helping the people where they need it. These are, as Erik described, these are people that have fallen on hard times, but it’s not the government that’s gonna create jobs for them. It’s the private market that creates jobs for them, so we have to make sure that the private market does that and does that soon.
Erik Hurst: Casey’s numbers might be on the high side, but the direction goes the right way in the sense that when you create incentives to work, people work. When you create incentives not to work, people don’t work. So we know the direction, and I think some of these programs are more salient than others, but we wanna promote an environment of work, and to the extent that we think as a society that some distribution needs to be done to help mitigate it, we wanna do it in a way that doesn’t discourage reentry into labor force or reaccumulation of skills to match the jobs that are out there.
Hal Weitzman: OK. Going back to the global economy, Anil Kashyap, the IMF and others have fretted publicly about the threat of deflation. How serious is that a concern?
Anil Kashyap: Well, depends where. I don’t think we’re headed toward deflation in the US. Very low inflation, I think, is gonna be present in many of these countries. I don’t think anyone expects Japan to have inflation above 2 percent for the next few years, even though they’re trying very hard now.
If you ask me what’s the risk over eight or 10 years, it’s that they don’t do the reforms and they wake up one day and they can’t borrow, and the only thing you can do is print money. So I still think a good old-fashioned currency crisis is a possibility if they don’t start doing things to facilitate growth. So I’m not so worried about deflation right now, but I am worried that if there isn’t growth, something’s gonna have to give.
Hal Weitzman: OK, and deflation in Europe?
Harald Uhlig: Well, we’re still having inflation more than deflation in Europe, even though it’s very, very modest. I think it’s lower than what the European Central Bank wants it to be. I think what we’re looking at is an entirely new phenomenon like when inflation really used to be an evil, and central banks had a hard time getting that into check. And then over the last 20 years or so, central banks actually managed to control inflation to a remarkable degree and get it down to the 1–2 percent range, really precisely controlling it, which is remarkable. And there were a lot of voices from the economic community that said let’s bring inflation down. Maybe some slight deflation is even a good thing. You can make that argument.
So now they have it so low, occasionally we’re gonna hit those constraints. Occasionally we’re gonna see zero number interest rates and occasionally you’re gonna see some deflation. The question is, is it bad? And they are much more skeptical than various other people.
So just as one example, I’m doing research with Chiara Fratto, who is a graduate student here in our department, taking a medium-scale new Keynesian model, we wanted to know how much the fact that the central bank hits that zero lower bound, how much that has contributed to the crisis. We found it’s a very small fraction. It’s true it would’ve been nice if they could’ve gone somewhat lower, but that’s not explaining why we are in such a deep recession.
Erik Hurst: The thing that Anil mentioned, I think kind of slipped in there, that it’s important is that a lot of the inflationary periods we’ve seen in recent times, when central banks have gotten good at managing inflation, have come from big fiscal burdens on the economy, a promise to pay a certain group and not a lot of tax revenue’s come in, so there’s the temptation to run the printing presses. And I think when you’re talking about the structural reforms and potential inflation going forward, the structural reforms of trying to manage with an aging population and low fertility rates could put this kind of pressure on modern economies, and that I think is the risk of inflation going forward, is these kind of fiscal imbalances within the government.
Hal Weitzman: Anil Kashyap, the US used to carry the global economy. US consumer was kind of the engine of the global economy. This year, it may be that—the US’s emerging markets have slowed down considerably—it may be that the US is the only economy to start growing again in earnest. Can it carry the global economy the way it used to?
Anil Kashyap: I don’t know. I’m not sure that anybody in the US should care. We should run good policy for what’s happening here, paying a little bit of attention to the world, but largely we should try to get our own house in order. We’ve got these aging problems that Erik talked about that are eventually gonna have to be attended to. It would be nice to get something in place on that front, but I think this year does look relatively good for the US, and assuming there isn’t a crisis in Europe or some huge crisis out of the Middle East or somewhere else, I think the outlook here is pretty good. So I see more risk to the upside of growth in the US than the downside. That’s the first time I think you could say that since before the crisis.
Hal Weitzman: Is the eurozone still kind of the potential danger here for the global economy?
Anil Kashyap: I guess that’s one of them. Certainly the Middle East I still think is one crazy dictator away from creating chaos, so I think you can’t take that off the table. And then if there was a real big collapse in emerging markets, it would be bad for the US, but I think Europe is the biggest risk largely because there doesn’t seem to be a Plan B in Europe. If you look back in Europe for the last three years, it’s always oh, then the German election will come. Now it’s the ASIC quality review of the banking system. After that happens and nothing changes, they’ll invent some other thing to look forward to, and the answer’s staring them right in the face. They’ve gotta do the stuff that the IMF’s been telling them to do for 10 years and that Harald’s been writing about. Everybody looks at Europe and says, you guys have huge government sectors, you have very weak incentives to hire people, to grow. You gotta fix that.
Germany did, it grows, but we explained that away some other way. We just wanna look . . . and some of the countries are going backward. France has been going backward for the last two years, so we’re not even talking fighting to a draw. It’s actually getting worse.
Hal Weitzman: Is there a danger that if you get growth, even modest growth, actually it has a downside, which is you never bother attending to these reforms, either in the US or in the eurozone?
Erik Hurst: There’s always an incentive to push hard things off to the future when maybe . . . The way I like to say, structural reforms might not be needed if you get big positive productivity draws for many, many periods in a row. So people hope that it’s easier to kick the can down, and there’s some part of distribution, which says maybe if you kinda kick it down and you get lucky, then you don’t need to do the other big structural reforms, but in practice you always do. And those periods of high, successive growth don’t come, and so it’s easier to adjust with these things earlier rather than later. You get smaller chains early, bigger chains later, so the more you kick the can down the road, the more disruptive adjustments need to take place.
Hal Weitzman: And actually productivity’s an issue we haven’t talked about, but that’s been . . . there was a dramatic fall in productivity for the first time last year, according to a recent report. Harald Uhlig, should we expect any kind of significant move forward from the eurozone this year?
Harald Uhlig: In productivity.
Hal Weitzman: Well, any of these reforms we’ve been talking about. You think it’s so necessary?
Harald Uhlig: I think that countries gradually come to grips with the situation. In Spain, I think I’m a bit more hopeful than Italy frankly, but who knows. As Anil pointed out, in France, things have been going backward for awhile, and Hollande started out trying to implement tax rates of 70 percent, as some of our colleagues elsewhere urged him to do actually, and now he’s retreating from this. So I think even in France it slowly dawns on them that there maybe a business-unfriendly policy is not the way to go. But whether we see much of a contribution toward economic growth from Europe, I think that will be a stretch.
Hal Weitzman: OK, well on that note, I’m gonna wind things up. My thanks to our panel, Erik Hurst, Anil Kashyap, and Harald Uhlig.
For more research, analysis and commentary, visit us online at chicagobooth.edu/capideas and join us again next time for another The Big Question.
Goodbye.
(light piano music)
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