Five Big Macroeconomic Questions for 2020 and Beyond
Slowing population growth, accelerating climate change, and other puzzles for the future.
The future is on its way.
Photographer: Simon Maina/AFP/Getty ImagesAs a new decade begins, I see five big questions facing macroeconomists, which I’ve listed in a roughly increasing order of difficulty.
Why not make full use of our productive resources? Inflation has been stuck below the Federal Reserve’s target of 2% for much of the past decade. It is expected to remain low for at least another year or two. The low rate of price increases is sending a clear message: there’s too little demand for goods and services relative to the supply of resources — especially human resources! — that can be used to produce those goods and services. So, why doesn’t the Fed respond to low inflation by easing monetary policy so as to boost demand, and make use of available supply?