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October 19, 2005

Mark Thoma Summarizes Tim Geithner

He writes:

Economist's View: New York Fed President Geithner on Global Imbalances: Geithner:

sees substantial risks due to global imbalances, risks that are not fully understood.

is insistent that fiscal authorities need to regain control of the budget and says "Improving our fiscal position is the most effective means we have available to reduce our vulnerability during this prolonged period of adjustment."

in equally insistent that fixed exchange rate regimes must allow more flexibility.

worries that increases in demand growth in the foreign sector needed to offset a decline in U.S. consumption and increase in U.S. saving will have to overcome difficult political hurdles.

says smooth adjustment requires, in addition to improved fiscal management, a strong and flexible financial system and open and free trade.

says that avoiding protectionism calls for "improving educational opportunity and achievement in this country, and perhaps also in improving the design of the temporary assistance we provide individuals who bear the brunt of the adjustment costs than come with greater global economic integration."

We are, I think, very fortunate to have Tim on our side.

Posted by DeLong at October 19, 2005 10:22 PM