Economist Prakken Says U.S. Fiscal Policy Unsustainable

The video discusses the Federal Reserve's role in managing fiscal policy, particularly in the context of the Jackson Hole conference and upcoming Congressional sessions. It highlights the unsustainable path of current fiscal policy and the potential macroeconomic benefits of adopting a sustainable approach. The discussion includes the concept of fiscal drag and the Fed's ability to counteract it by maintaining lower interest rates. The video also explores the impact of fiscal policy on equilibrium interest rates and emphasizes the importance of gradual fiscal adjustments to sustain economic growth and achieve long-term benefits.

What are the potential macroeconomic gains of putting fiscal policy on a sustainable path?

How might the Fed's actions be influenced by unsustainable fiscal policy?

What is the relationship between fiscal policy sustainability and equilibrium interest rates?

In what ways can gradual fiscal adjustment benefit the economy?

What are the implications of fiscal contraction on cyclical downturns?