S5 Ep35: Director's Cut: The case for a legislative remedy for recessions

Bruegel's Maria Demertzis welcomes Yale Law School
professor Yair Listokin to this Director's Cut of 'The Sound of
Economics', to discuss how law might be deployed as a
macroeconomic tool to counter financial crisis.


In this episode of Director's Cut, Bruegel's deputy director
Maria Demertzis talks to Yair Listokin, a professor at Yale Law
School, about the effect law could have on achieving
macroeconomic objectives.


In his new book titled 'Law and Macroeconomics', Yair Listokin
puts forward the idea that law has the ability to function as an
instrument of macroeconomic policy. He argues that the time it
took for private spending to recover after the 2008 financial
crisis could have been cut, had legislation played a more vital
role in the process.


Here the two elaborate on these ideas, focusing particularly on
the perceived trade-off between law's role in maintaining
stability, and its potential to be used as a real-time response
to economic shocks. They also discuss the applicability of this
policy approach in the European reality of multiple legal
frameworks and central banks struggling to stimulate aggregate
demand at the zero lower interest rate bound.


You can find more on macroeconomic policy in previous editions of
the Director's Cut. First, we recommend Bruegel director Guntram
Wolff's conversation about the growth and stability challenges
facing the global financial system, with Tharman Shanmugaratnam,
deputy prime minister of Singapore and chair of the G20 Eminent
Persons Group, and Jean Pisani-Ferry, mercator senior fellow at
Bruegel. Second, consider Maria Demertzis' discussion with Martin
Sandbu of the Financial Times, on the topic of what the field of
economics has learned in the decade since the financial crisis.