Claudia Sahm's Sahm Rule for direct payments when unemployment rises is getting more airplay right now—and the unemployment rate is now likely to rise over the next six months. I first saw this proposal in a novel Robert Heinlein published in 1947, Beyond This Horizon about life in a future near utopia: Jeanna Smialek: ‘Now Is the Time’: A Fed Official Urges Congress to Plan for Recessions https://www.nytimes.com/2020/02/21/business/economy/fed-rate-recession-congress-stimulus.html: 'One such proposal is the so-called Sahm Rule. Created by Claudia Sahm, a former Fed economist, it would use a pronounced jump in the unemployment rate to trigger a fiscal response such as stimulus payments to households. Ms. Brainard’s colleague Mary C. Daly, president of the Federal Reserve Bank of San Francisco, has also made a case for government spending policies that kick in immediately. Central bankers “face greater uncertainty about the impact of our tools and their ability to achieve our goals,” she said in a speech this month. “Fiscal policy will need to play a larger role in smoothing through economic shocks,” and “expanding the array of automatic stabilizers that form part of the social safety net can help mitigate the depth and duration of economic downturns.”...
#noted #2020-02-28
