Wednesday, December 5, 2007

Feldstein on Recession

Martin Feldstein suggests something in the WSJ article: "How to Avert Recession?"
1. Expansionary monetary policy: more interest rate cut.
2. Expansionary fiscal policy with automatic stabilizer because it can
  • Be more efficient
  • Avoid asset bubble
  • Avoid weakening dollar

3. Freezing mortgage rate which will begin to adjust in 2008 is not a good idea.