Economic Outlook for 2014
The annual meeting of the American Economic Association (AEA) and allied social science associations, held in Philadelphia at the beginning of January, provided opportunities for economists to meet and present papers on a wide variety of timely topics. Access to abstracts, papers and presentations is available at www.aeaweb.org. There are many papers that we believe will be of interest to readers of Commentary. For convenience, a relevant selection is listed here under the following topics in the order presented at the AEA meeting: Health Economics; Macroeconomic Uncertainty; Systemic Risk; Public Finance and Policy; Insurance in Developing Countries; Asset Management and Market Efficiency; Behavioral Asset Pricing; Credit Risk; Institutional Investment Portfolio Selection; Macro Finance; Deflation; Macro Policy and Financial Stability; International Climate Regime; Big Data; Labor Market Outcomes; Finance and Development; Cash Transfer Programs; African Economic Growth and Development; Capital Controls and Macro-Prudential Policies; Discounting for the Long Run; Finance and Asset Markets; Monetary Policy; Strategies for Achieving Fiscal Balance; Credit Rating Agencies; Risk Management; Fiscal and Debt Policies; Social Entrepreneurship; China and the World Economy; Financial Regulation; New Modeling Tool s ; Sovereign Debt Crises; Shadow Banking; Health Insurance Markets; Transitioning from a Low Interest Rate Environment; Transportation Economics; Inequality; International Trade and Finance; Market Pricing and Credit Spreads; Climate; Energy and Environment; Housing; Recessions and Recoveries; Euro Crisis; Capital Structure Theory; Commodity Markets; Hedge Funds; Securitization; Redressing Economic and Social Inequalities; Fostering Economic and Social Stability; Uncertainty, Risk and Discounting in Climate Policy; Growth and Socio-Economic Policy; Sustainability of the Chinese Growth Model; Sovereign Risk and Currency Wars; Evaluating Health Insurance Reform; International Trade Theory; Bank Risk-Taking; Global Economic Outlook; Assessment of Economic and Financial Knowledge; Banking Supervision and Regulation; Financial Globalization; Immigration; Labor Markets; Measurement and Impacts of Uncertainty; Taxation; Understanding Economic and Financial Cr i s e s ; Urban Development and Transportation; Towards European Banking Union; Volatility and Asset Returns; Measuring the Effect of the Minimum Wage; Strength and Efficacy of Public and Private Retirement Systems; Advances in Empirical Research; South-South Economic Integration and Development; Behavioral Economics and Public Policy; Economics at the Federal Reserve Banks; Macroeconomic Impact of Population Aging; New Perspectives on Corporate Governance; Growth or Stagnation for the United States Economy; Determinants and Consequences of Corporate Cash Holdings; Mutual Funds and Investment Choice; Private Equity; Topics in Risk and Economics; Sovereign Debt Default; Risk and Ambiguity; Costs and Consequences of Austerity; Poverty Measurement; Personal Finance Education; Forecasting Growth and Development; Asia and External Relations; Finance and Global Recessions; Global Risks and Currencies; Determinants of Infant Mortality; Macroeconomics of Austerity; Sovereign Debt Restructuring; Economic Impact of Transportation Infrastructure; Health Care Costs; Household Finance and Retirement Choices; Real Estate Values; Bounded Rationality and Markets; The Price of Oil; Labor Force Participation, Self-Employment and Outsourcing; High– Skill Immigration in the Global Economy; Stock Market Trading; Asset Allocation; Real Estate Investment Trusts; Game Theory; Human Capital at Work; Shifting Risk in Healthcare and Retirement; Role of Emerging Market Economies in the Global Economy; Economic Impact of Natural Disasters; Liquidity Supply and Asset Prices; Measuring Financial Variables in the System of National Accounts; Providing Evidence- Based Policy Advice; Treasury Markets; Financial Analysts; High Frequency Trading; Urban Public Policy; Corporate Investment; Deforestation and Land-Use Change; Financial Sustainability and Fragility; Subjective Longevity Risk; Welfare Policies in Latin America; Asset Pricing Theory; and Inference and Statistical Decision Theory. The American Economic Association is to be congratulated for its success in bringing together in one three-day meeting such a diverse program of intellectually-stimulating and thought-provoking topics covering the full spectrum of current economic and social issues. Readers of Commentary will assuredly find sufficient good reading from among these topics to occupy any spare time throughout 2014.
One of the much-anticipated highlights of the AEA meeting was a speech given by Federal Reserve Chairman Ben Bernanke. In his speech, The Federal Reserve: Looking Back, Looking Forward, Chairman Bernanke reflected on some accomplishments of the past eight years as well as some uncompleted tasks. His remarks were focused on four main areas: (i) the Federal Reserve’s commitment to transparency and accountability; (ii) financial stability and financial reform; (iii) monetary policy; and (iv) prospects for the U.S. and global economies. He stressed that although the reported unemployment rate has declined, labor force participation has continued to decline. He also stated that although long-term fiscal sustainability is a critical objective, excessively tight near term fiscal policies have likely been counterproductive. He explained that a more balanced policy mix might also avoid some of the costs of very low interest rates, such as potential risks to financial stability, without sacrificing jobs and growth. Chairman Bernanke noted that the U.S. recovery appears to be somewhat ahead of most other advanced industrial economies where real GDP is three percent below pre-recession levels in the euro area and two percent below in the United Kingdom.