A distinguished Yale economist and legal scholar’s argument that law, of all things, has the potential to rescue us from the next economic crisis.
After the economic crisis of 2008, private-sector spending took nearly a decade to recover. Yair Listokin thinks we can respond more quickly to the next meltdown by reviving and refashioning a policy approach whose proven success is too rarely acknowledged. Harking back to New Deal regulatory agencies, Listokin proposes that we take seriously law’s ability to function as a macroeconomic tool, capable of stimulating demand when needed and relieving demand when it threatens to overheat economies.
Listokin makes his case by looking at both positive and cautionary examples, going back to the New Deal and including the Keystone Pipeline, the constitutionally fraught bond-buying program unveiled by the European Central Bank at the nadir of the Eurozone crisis, the ongoing Greek crisis, and the experience of U.S. price controls in the 1970s. History has taught us that law is an unwieldy instrument of macroeconomic policy, but Listokin argues that under certain conditions it offers a vital alternative to the monetary and fiscal policy tools that stretch the legitimacy of technocratic central banks near their breaking point while leaving the rest of us waiting and wallowing.
Yair Listokin is the Shibley Family Fund Professor of Law at Yale Law School. He has been honored with a Milton Friedman Fellowship from the Becker-Friedman Institute at the University of Chicago and has served as a Visiting Professor at Columbia Law School, Harvard Law School, and New York University School of Law. His research has been featured in The Wall Street Journal, Fortune, CNN.com, the The Boston Globe, and Slate.
I. Law, Fiscal Policy, and Monetary Policy
1. Macroeconomics outside of a Liquidity Trap
2. Law and Fiscal Policy When Interest Rates Are Well above Zero
3. Law and Monetary Policy When Interest Rates Are Well above Zero
4. The Painful Costs of Prolonged Recessions: Evidence and Theory
5. Law, Monetary Policy, and Fiscal Policy in a Liquidity Trap
6. Institutional Reform of Fiscal Policy
7. Expansionary Fiscal Policy by Administrative Agencies
II. The Pros and Cons of Expansionary Legal Policy
8. Expansionary Legal Policy: The Case of the Keystone Pipeline
9. The Costs of Expansionary Legal Policy
10. Law and Macroeconomics: Lessons from History
11. Expansionary Legal Policy Options
Conclusion: Five Lessons of Law and Macroeconomics