Ten years after the 2008 economic recession, the government is ill prepared to defend itself against the next economic downturn. Interest rates remain low, partisanship remains intractable, and the federal debt is rising at an unprecedented rate. These factors will hamstring traditional monetary and fiscal stimulus.
In his new book, Law and Macroeconomics, Yale Law School Professor Yair Listokin argues we can respond more quickly to the next economic crisis by deploying a policy approach whose proven success is too rarely acknowledged: regulation. He proposes we take seriously the idea that law can function as a macroeconomic tool, capable of stimulating demand when needed and relieving demand when it threatens to overheat economies. And though history has demonstrated that law is an unwieldy instrument of macroeconomic policy, Listokin argues that under certain conditions it offers a vital alternative to monetary and fiscal policy tools.
During this Urban-Brookings Tax Policy Center event, Listokin will present the key findings of his research, and panelists will deepen the discussion by addressing the following questions:
What role does the law play in stimulating aggregate demand?
How can laws and regulation complement traditional fiscal and monetary policy approaches to stabilizing the business cycle?
Can regulations act as an effective alternative to fiscal and monetary policy during economic downturn?
Which regulations should lawmakers implement to combat economic shocks?
Yair Listokin, Shibley Family Fund Professor of Law, Yale Law School @YaleLawSch
Claudia Sahm, Chief of Consumer and Community Development Research, Federal Reserve Board @Claudia_Sahm
Jay Shambaugh, Director of The Hamilton Project and Senior Fellow in Economic Studies, Brookings Institution @JayCShambaugh
William Gale, Codirector, Urban-Brookings Tax Policy Center; Arjay and Frances Miller Chair in Federal Economic Policy, Economic Studies Program, Brookings Institution (moderator) @WilliamGale2