Janet Yellen’s term as Federal Reserve chair expires in February 2018, providing President Trump with a unique opportunity to reshape monetary policy and improve the economy’s growth trajectory. What should he look for in the next chairman?
First, the president should seek someone with a deep understanding of the American economy’s dynamism—someone who appreciates its capacity to grow and the important, but circumscribed, role of monetary policy in contributing to growth without inflation. Many observers believe the U.S. economy can’t grow much faster than the anemic 2% of recent years. On the contrary, persistent stagnation is neither the experience of the past few decades nor our immutable destiny.
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