Featuring Janet Yellen, distinguished fellow at Brookings Institution and former chairman of the Board of Governors of the Federal Reserve, and Kevin Warsh, distinguished visiting fellow at the Hoover Institution and former member of the Board of Governors of the Federal Reserve in conversation with Neil Irwin. The panel will discuss the current state of the economy, how it’s impacted by world affairs, and what tools the Federal Reserve has at its disposal to influence monetary policy.
by Bilal M. Ayyub, Alice Hillvia National Academy of Engineering
Wednesday, July 10, 2019
Each year, governments and the private sector invest trillions of dollars in infrastructure that may not withstand future risks from climate change (Oxford Economics 2017). Most of the world’s new infrastructure will be built in developing countries, which face the dual challenges of disaster response and urbanization (Oxford Economics 2017), but responding to natural disasters is also a major challenge in developed countries.
European voters turned their backs last weekend on mainstream political parties that had controlled their nations for much of the past century. Impressive numbers voted instead for populist (i.e., hate-mongering) outfits that make immigration and cultural conflict their main issues, or for Green parties that focus on ecology and the dangers of climate change. Conservatives and Social Democrats became, at least for now, statistical remnants of a fast-receding past in which arguments about capital, labor and taxes were dominant political messages.
A variety of promising technologies that might be considered “carbon backstops” are now emerging. Such technologies would be impactful in reducing greenhouse gas emissions, scalable, and available for rapid deployment—but too expensive to justify broad deployment today.
One can view the proximity of the current Fed policy stance to the zero-lower-bound as an accident of history, or a wise choice. So, too, the grand scale and scope of the Fed’s balance sheet. No matter one’s judgment, the Fed finds itself with less conventional and unconventional ammunition. With ammunition low, Fed credibility – to act independently, get policy right, and explain well the rationale for its actions—is at a premium. Fed cred will be relied upon most when the economy slows or confronts a shock. So it’s encouraging that Fed is open to considering reforms in the conduct of monetary policy.
Growing up as the son of a Polish immigrant, former New Mexico Education Secretary Christopher Ruszkowski heard regularly from his father that “reading is the key to all knowledge.” According to his dad, reading is the “path to choice, options, conversation, expression and opportunities of all stripes.” Who could argue with him? In his opinion, literacy created life’s possibilities for his children, one of whom became a social studies teacher and went on to lead one of the most diverse school systems in the nation.
As the impacts of climate change are felt more forcefully around the globe, decision makers are asking, with increasing urgency, how they can make their communities and businesses more resilient. One obvious place to start is infrastructure. To address this, the Hoover Institution convened a yearlong collaboration with leading experts and practitioners in development banks, government agencies, universities, private firms, non-governmental organizations, and professional associations. It drew on diverse perspectives to the challenges of resilience, including physical and social science, engineering, policy, finance, and education. The resulting paper lays out seven strategies for developing more climate-resilient infrastructure.