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Contact: Daneil Mazone, Media Relations, 267-698-8717
Dublin, Ireland — It’s time for fiscal and other policies to take the lead in growing the American economy, said a top Fed official today. Federal Reserve Bank of Philadelphia President Patrick T. Harker made the comments in a speech on international trade at the Global Interdependence Center’s Central Banking Series in Dublin, Ireland.
“The reach and arsenal of monetary policymakers is limited” in addressing long-term economic issues such as the consequences of international trade, Harker said. “At this juncture in the post-crisis recovery, at least in the U.S., it’s time for fiscal and other policies to take the reins. We cannot foster growth without long-term approaches, legislation, and investments that are far outside the scope of the Fed’s reach.” International trade is a positive from a “purely economic perspective,” he said, although he noted that the effects of trade are unevenly distributed and experienced more acutely by those who feel the downside.
Harker proposed that fiscal policy and legislative action can “alleviate the pain that those who bear the brunt of the downside encounter,” such as low-skilled workers who can lose out to international competition. “Whether it’s some form of wage insurance or retraining, we have to find some way to help these communities, many of which have been all but abandoned, to transition to a new economic reality,” he said.
All in all, trade is a net positive, Harker said. “A connected world is a better place and trade helps far more people than it hurts — we just need to find a way for everyone to benefit from that free exchange.”