Global Economic Prospects: Spring 2018

Karen Dynan, nonresident senior fellow and Professor of the Practice in the economics department at Harvard University, led off the Institute's latest semiannual Global Economic Prospects session with a presentation on the US and global economic outlook, including prospects for sustained global expansion over the next few years. Marcus Noland, executive vice president and director of studies, addressed the prospects for economically meaningful conflict over international trade and how an increase in trade barriers could affect both the macroeconomic outlook and financial markets. Jacob Funk Kirkegaard, senior fellow, discussed the outlook for wage inflation in advanced economies and the likelihood of a surge in inflation.

Dynan focused in particular on the substantial fiscal stimulus associated with the recently passed tax cuts and federal spending increases and how these changes are likely to affect the US economy and the path of monetary policy. Dynan was assistant secretary for economic policy and chief economist at the US Treasury Department during 2014–17 and vice president for economic studies at the Brookings Institute during 2009–13, following a distinguished career at the Federal Reserve Board.

Noland addressed the channels of economic impact from US trade conflict with China, NAFTA partners, and other countries. He led the Institute’s widely cited multi-author study, Assessing Trade Agendas in the U.S. Presidential Campaign, which modelled the county-level impact on the US economy of trade restrictions on China and Mexico. With Sherman Robinson and coauthors, he continues to analyze the actual harms of trade wars. Associated with the Institute since 1985, Noland is the author of numerous studies on trade, development, and Asian economies.

Kirkegaard discussed why wage inflation has remained weak in most advanced economies, despite shrinking labor market slack in some areas. He analyzed other factors that reduce equilibrium wages and workers’ bargaining power as well as labor supply developments. Before joining the Institute in 2002, Kirkegaard worked with the Danish Ministry of Defense and in the private financial sector.