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- | Hello again and welcome as Instructional Dynamics | 0:02 |
presents a look at the current economic picture | 0:04 | |
by Professor Paul Samuelson, | 0:07 | |
professor of Economics at the Massachusetts | 0:09 | |
Institute of Technology. | 0:11 | |
Professor Samuelson, the recent GNP announcements | 0:13 | |
have been made. | 0:16 | |
Would you like to comment on them this morning? | 0:17 | |
- | On my last tape, I had to guess | 0:19 |
what would be the final second quarter figures. | 0:21 | |
Now they're in. | 0:24 | |
To listeners of this series, | 0:25 | |
they came as no surprise. | 0:27 | |
The gain over the second quarter in money GNP | 0:29 | |
was a bit more in the first quarter's gain | 0:32 | |
more or less as I had suspected. | 0:35 | |
And my guess had been that there would be a bit more | 0:38 | |
inventory accumulation in the second quarter. | 0:41 | |
But greater weakness in the growth of final demand | 0:44 | |
than in the first quarter, | 0:47 | |
and that too proved to be about right. | 0:49 | |
I suppose the most notable feature | 0:53 | |
of the second quarter data was the fact | 0:54 | |
that real growth is still slowing down | 0:56 | |
even more than before. | 0:59 | |
Only 2.3% annual rate of real growth | 1:01 | |
against 2.5% in the first quarter. | 1:05 | |
And don't forget that the second quarter data | 1:09 | |
for 1968 just a year ago | 1:11 | |
showed more than a six percent real growth rate. | 1:14 | |
Now to my mind, both physical policy and monetary policy | 1:18 | |
must be given the credit for the degree of moderation | 1:23 | |
that is now going on. | 1:26 | |
I realized that there are some monetarists | 1:29 | |
who had claim the lion's share of the credit | 1:31 | |
for the action of the Fed in clamping down | 1:34 | |
on the rate of growth of the money supply. | 1:38 | |
But I also know that we have not had a controlled experiment | 1:41 | |
and it would take God's wisdom itself | 1:46 | |
to conclude for the mixed up historical data | 1:50 | |
that the monetarists are right in this extreme view. | 1:52 | |
Of course the important thing is the future. | 1:56 | |
At this point, I think I have to go along | 1:59 | |
with the view expressed by Assistant Secretary | 2:01 | |
of Commerce Chartner | 2:04 | |
at the time that he released | 2:06 | |
the Commerce Department announcement | 2:09 | |
on the new revised Gross National Product data. | 2:11 | |
He said that the third quarter would also in money terms | 2:17 | |
be fairly strong. | 2:20 | |
I think it would be rush to postulate less | 2:22 | |
than a $15 billion increase in the money GNP | 2:26 | |
in the third quarter. | 2:30 | |
And for the last half of the year 1969 as a whole, | 2:33 | |
I suppose something like a $29 billion increase | 2:38 | |
might be in the ball park. | 2:43 | |
This means that the year 1969 will average as a whole | 2:46 | |
something like $933 billion GNP. | 2:52 | |
That's a much higher figure than most people | 2:57 | |
have been talking about. | 3:00 | |
But we must be careful. | 3:03 | |
There have been revisions of a purely technical character | 3:06 | |
in the GNP data. | 3:11 | |
And those revisions are worth at least $5 billion. | 3:13 | |
So when we say 933 billion for the year, | 3:21 | |
that should be thought of as something | 3:26 | |
like $927 or $928 billion in terms of | 3:30 | |
the previous data upon which | 3:35 | |
all the various forecasts were made. | 3:39 | |
Now, you'll notice that this previous, | 3:42 | |
the previous forecasts ran a good deal less | 3:48 | |
than the 927, 928 billion | 3:52 | |
that now seems to be indicated. | 3:57 | |
This was true for the forecast by the Council | 4:00 | |
of Economic Advisors of the outgoing administration. | 4:06 | |
This shortfall in estimate was true | 4:10 | |
of the prediction made by the new | 4:14 | |
Council of Economic Advisors shortly after they took office. | 4:18 | |
This is also the case with respect to | 4:22 | |
most of the forecasts that I've seen of the monetarists. | 4:26 | |
The Harris Cross company which is supposed to depend heavily | 4:30 | |
on monetarism had, for its forecast, | 4:35 | |
something like 918 billion. | 4:40 | |
This at a time when you will recall my own forecast | 4:44 | |
was $924 billion. | 4:47 | |
The First National City Bank | 4:51 | |
is supposed to be another bank | 4:53 | |
that has had fabulous success | 4:55 | |
using the methods of monetarism. | 4:58 | |
Well, the experts in the First National City Bank | 5:00 | |
are revising upward their estimates | 5:04 | |
from those that they published earlier. | 5:08 | |
Did anybody predict this degree of strength? | 5:12 | |
Now, my 924 billion was close but no cigar as they say. | 5:16 | |
Actually, a month or two ago, | 5:25 | |
when I wrote for the London Financial Times midyear, | 5:28 | |
I said that the 924 billion figure | 5:34 | |
looked still pretty good. | 5:37 | |
But if it was going to be an error, | 5:39 | |
it almost surely was gonna be an error | 5:41 | |
by being too low rather than being too high | 5:44 | |
and that does seem to be the case. | 5:48 | |
I suppose if I had to give the palm of victory | 5:51 | |
for coming nearest to what seemed to be | 5:53 | |
the indicated dollar figures now, | 5:56 | |
I would have to give that palm to Pierre Rinfret | 5:59 | |
at the Boston Rinfret Associates | 6:04 | |
who, early in the year, was talking about | 6:07 | |
$925 to $930 billion of GNP. | 6:10 | |
So I do bestow that on him. | 6:15 | |
But let me say that you can't win them all | 6:18 | |
and that he did not get this estimate, his estimate | 6:20 | |
for exactly the right reasons. | 6:27 | |
He, for example, was able to see | 6:30 | |
what nobody else was able to see in the figures, | 6:32 | |
namely, a great upswing in Federal expenditure. | 6:34 | |
And particularly, war time Vietnam expenditure. | 6:40 | |
Well, others couldn't see it. | 6:43 | |
And the others turned out to be right. | 6:45 | |
In this case, the man in the minority, Pierre, | 6:47 | |
was wrong, and I would say that | 6:51 | |
he was inadvertently correct because | 6:55 | |
almost nobody forecast the degree of price increase. | 6:57 | |
The REO estimates that various people made | 7:02 | |
such as my own estimate are almost directly | 7:05 | |
on the nose, but the rate of price inflation | 7:10 | |
has been greater than it earlier had been forecast. | 7:14 | |
Now, why do I say that the third quarter | 7:18 | |
is still going to be pretty strong in money terms? | 7:22 | |
If you are a simple-minded monetarist, | 7:26 | |
then you're more than six months | 7:31 | |
since the Federal Reserve began its tightness | 7:35 | |
has now elapsed. | 7:37 | |
And you should begin to make simple estimates | 7:39 | |
of a considerable deceleration in the GNP. | 7:43 | |
I'm not a simple monetarist, | 7:47 | |
but I would like to suggest that | 7:49 | |
that doctrine more accurate than I believe it to be. | 7:55 | |
On this particular occasion, it should be moderated | 8:01 | |
to take account of the pay increase | 8:05 | |
by the Federal government, which is taking place | 8:10 | |
in this very quarter. | 8:14 | |
That pay increase is going to send the GNP deflator | 8:16 | |
up sharply for purely statistical reasons. | 8:20 | |
And there is nothing in the limitation on the money supply | 8:25 | |
which could be expected to have any particularly | 8:29 | |
moderating effect upon this almost purely bookkeeping | 8:32 | |
way of reckoning the money GNP. | 8:37 | |
I will remind you that the money GNP | 8:40 | |
makes no correction for increase in productivity | 8:43 | |
in the government sector. | 8:45 | |
And it measures the output of that sector | 8:48 | |
by the input, and the input is the payroll. | 8:50 | |
And so as the payroll increases, | 8:53 | |
almost certainly, the GNP price deflator, | 8:56 | |
which has been running at a 4.9% annual rate | 8:59 | |
in the first couple of quarters this year. | 9:04 | |
And I wanna call attention, | 9:07 | |
your attention to the fact that that's a quickening | 9:08 | |
of the rate of overall inflation. | 9:10 | |
Well, for the third quarter, | 9:14 | |
it is surely going to run over five percent. | 9:15 | |
That will be a misleading indication | 9:20 | |
of the degree of virulence | 9:22 | |
of the inflationary creep. | 9:24 | |
Because the whole of the pay increase | 9:27 | |
legislated last year will come right smack | 9:29 | |
into that single quarter. | 9:33 | |
This means, I believe, that the real GNP | 9:37 | |
will continue to languish. | 9:41 | |
It could again be 2.3%. | 9:46 | |
It could even fall down to the two percent level. | 9:49 | |
And similarly, I see nothing in the picture | 9:56 | |
which suggests for the fourth quarter of the year | 10:00 | |
and say for the first quarter of next year | 10:03 | |
that the real GNP will snap back | 10:05 | |
to anything like our full employment growth potential, | 10:09 | |
which I'll remind you is something like four plus percent | 10:13 | |
at this time. | 10:17 | |
Hence, other things being equal, | 10:18 | |
one can expect the average hours work per week | 10:20 | |
to decline a bit. | 10:24 | |
One can expect the production index, | 10:25 | |
which has been remarkably strong | 10:29 | |
in its rate of growth recently, | 10:33 | |
considering that GNP is only growing in real terms | 10:34 | |
at two and a third, two and a half percent. | 10:37 | |
Production has been growing the first half of the year | 10:41 | |
and more like four and five percent. | 10:43 | |
I would expect that to taper down | 10:45 | |
to a lower rate of growth. | 10:48 | |
The unemployment rate, which has held | 10:51 | |
at so low a level at 3.4%, | 10:53 | |
only one tenth of a percent above | 10:56 | |
this 3.3 all time low | 10:59 | |
of recent times can be expected to climb. | 11:02 | |
But, I wanna warn again and remind you | 11:05 | |
that this climb could be expected to be moderate | 11:09 | |
because with labor markets still very tight | 11:12 | |
and with people still not convinced that there is | 11:14 | |
a lasting pause or recession ahead, | 11:17 | |
there will be a tendency for employers to hoard labor, | 11:21 | |
to let productivity drop, | 11:24 | |
to let there be pressure on unit cost of production | 11:28 | |
and on profit margins but not to let go | 11:32 | |
of your precious labor force | 11:35 | |
which you may not in a market like this | 11:36 | |
be able to recruit again. | 11:38 | |
As I'm recording, the fate of the surtax | 11:41 | |
is still unknown. | 11:46 | |
We're gonna dispute in Congress at a tactical level | 11:48 | |
and at a strategic level between the democrats | 11:51 | |
who insist upon having, as their quid pro quo | 11:56 | |
for voting the rather unpopular extension of the surtax | 12:00 | |
a measure of tax reform. | 12:04 | |
And the administration, as up to the time | 12:07 | |
that I'm now speaking, refusing particularly | 12:11 | |
to compromise and promising reform ahead | 12:15 | |
but wishing for the surtax extension immediately. | 12:20 | |
Now, what is my own view? | 12:23 | |
As far as the macroeconomic business cycle | 12:25 | |
situation is concerned, it seems to me | 12:27 | |
that the matter is very clear. | 12:29 | |
I was happy to join | 12:30 | |
with the economists of the administration | 12:34 | |
although I'm not a republican. | 12:37 | |
I'm not a spokesman for the republican Nixon administration. | 12:38 | |
As a political economist interested in good policy | 12:42 | |
for the country, I was perfectly prepared to go along | 12:46 | |
with the petition instigated by Paul McCracken | 12:50 | |
and signed by a number of leading | 12:54 | |
so called establishment, economist myself, | 12:56 | |
Walter Heller, others, democrats and republicans, | 13:00 | |
that the surtax should be extended. | 13:05 | |
That it was important in the fight against inflation | 13:08 | |
that the surtax be extended. | 13:12 | |
I base this upon the view that physical policy | 13:14 | |
does have potency. | 13:18 | |
I deny the monetarist view that there is no potency | 13:19 | |
in tax rate changes. | 13:23 | |
And since the inflation is still quickening, | 13:26 | |
the consumer's price index has been rising recently | 13:30 | |
at something like a 7% per anum rate. | 13:34 | |
Also, prices are rising at three to four percent, | 13:39 | |
which is a lot for industrial wholesale prices | 13:42 | |
even though there's been a little sign | 13:45 | |
of slowing down and no acceleration | 13:47 | |
in that rate of growth in wholesale prices. | 13:50 | |
The GNP deflator, I remind you, | 13:54 | |
was rising at a 4.9%, which is perceptively greater | 13:57 | |
than the 4.3%, 4%, | 14:03 | |
three and a half percent of earlier years. | 14:07 | |
So the inflation problem is very much with us. | 14:11 | |
The wage settlements, which we're gonna have to live with, | 14:14 | |
not for this year alone but for next year, | 14:17 | |
the year after that and the year after that | 14:20 | |
have had a median level of seven plus percent, | 14:23 | |
as against six plus percent last year. | 14:28 | |
So much so that this shook out of the Secretary of Labor, | 14:31 | |
George Shultz a state which must been very painful | 14:35 | |
for him to make. | 14:39 | |
George Shultz has been one of the most vocal | 14:40 | |
of economists on the position | 14:43 | |
that the government should not have | 14:48 | |
presidential wage price guide posts. | 14:50 | |
That the government should not tell | 14:53 | |
unions what to do. | 14:55 | |
It should not tell employers what to do. | 14:56 | |
It should appeal for industrial statesmanship, | 14:58 | |
which the members of this particular school of thought | 15:02 | |
regard as just so much blah. | 15:05 | |
It's blarney. | 15:08 | |
It doesn't get you anything. | 15:09 | |
Why waste your time with it? | 15:11 | |
And furthermore, if in some sectors of the economy | 15:14 | |
which are very vulnerable to the pressure of public opinion, | 15:18 | |
it does get you something in a way of restraint, | 15:21 | |
then according to the members of the school | 15:23 | |
that I must say I do not agree with | 15:25 | |
the members of the school, that represents a distortion. | 15:26 | |
Well, once you're in office, | 15:30 | |
as some sages says, power sobers. | 15:33 | |
And secretary Shultz, unlike Professor Shultz | 15:37 | |
has had to come out in public | 15:41 | |
and warn management against these high settlements. | 15:44 | |
He calls it in such a way as to suggest | 15:50 | |
that their own long-run self interest | 15:55 | |
is against their settling at two high levels because, | 15:58 | |
he says, and I think in this quite rightly, | 16:03 | |
there's going to be tapering off of demand ahead, | 16:06 | |
and you may rule the generous settlements | 16:09 | |
that you are tempted now to make | 16:13 | |
in order to buy a piece. | 16:15 | |
Of course, one can ask the question, | 16:18 | |
what can the secretary of labor do | 16:20 | |
and did any secretary of labor | 16:23 | |
if management takes to heart his suggestions, | 16:26 | |
gets to be very tough indeed, | 16:29 | |
and we have a rush of lengthy, crippling strikes. | 16:31 | |
Then, perhaps once again, he'll find himself | 16:38 | |
changing his tune. | 16:42 | |
Well, it just proves that | 16:43 | |
it's a hard dollar working for the government | 16:45 | |
and the lot of a cabinet officer in particular, | 16:48 | |
the Secretary of Labor is not to be envied. | 16:51 | |
Turning to the future, | 16:55 | |
I want to comment on one analysis | 16:58 | |
is likely to prove most useful | 17:02 | |
in interpreting the passing scene in the months | 17:04 | |
and quarters ahead. | 17:08 | |
Some of you will have seen the article | 17:12 | |
in the Wall Street Journal of recent date on IDI. | 17:14 | |
It's a nice plug I suppose | 17:18 | |
for that organization and for this series of tapes. | 17:19 | |
Journalists like to have news. | 17:26 | |
They like to have things which are a little bit titillating, | 17:28 | |
and so, there were some emphasis placed upon the fact | 17:31 | |
that in my tape, my commentaries and my views | 17:35 | |
are not exactly the same as those | 17:40 | |
of Professor Milton Friedman | 17:44 | |
on the companion tape. | 17:45 | |
I think perhaps | 17:47 | |
the Wall Street Journal story | 17:49 | |
exaggerated the differences in substantive viewpoints | 17:52 | |
that are often expressed by Professor Friedman and myself. | 17:57 | |
People like to exaggerate. | 18:03 | |
I perhaps like to minimize; | 18:05 | |
some people like to maximize the differences. | 18:08 | |
And so, a few words might be in point, | 18:12 | |
not to set the record straight | 18:17 | |
as far as a journalistic blurb is concerned, | 18:20 | |
but just to prepare the analyst | 18:24 | |
for what, in my opinion, ought to be | 18:28 | |
the strategic things to be watching in the period ahead. | 18:31 | |
The viewpoint which I represent, | 18:37 | |
the rather eclectic, | 18:41 | |
so called post-Keynesian or Neo-Keynesian | 18:42 | |
viewpoint, which says that monetary stocks are important, | 18:45 | |
and by the way, our emphasis is upon the stock of money, | 18:51 | |
our emphasis is not so much | 18:55 | |
as the monetarists would have it | 18:57 | |
on the rate of change of the stock of money. | 19:01 | |
We say that money does matter. | 19:05 | |
We say that money matters much. | 19:07 | |
We say that other things matter. | 19:11 | |
I think it matters a great deal | 19:13 | |
if the SCC Department of Commerce survey | 19:15 | |
shows that businessmen have a tremendous desire | 19:20 | |
to invest in plant and equipment. | 19:25 | |
If inflation or expectation's made them reckless | 19:29 | |
of current costs and anxious to build ahead, | 19:32 | |
I think that that is a very important factor | 19:34 | |
having to do with the aggregate level of inflation | 19:38 | |
and overfull employment. | 19:44 | |
I think that the level of tax rates is very important. | 19:47 | |
I think the level of government expenditure | 19:49 | |
is very important. | 19:52 | |
I think that if you have a consumption boom, | 19:55 | |
a great increase in the propensity to consume. | 19:58 | |
For example, in 1954-55, | 20:01 | |
the American consumer went wild | 20:07 | |
over the new water would be our models. | 20:08 | |
And we had a tremendous blip, an upsurge | 20:11 | |
in the time series of automobiles. | 20:17 | |
I'm sure that that had a lot to do | 20:19 | |
with the tremendous strength | 20:21 | |
of the recovery in 1955, which surprised almost everybody, | 20:24 | |
which created a residual | 20:29 | |
in most of the macro-economic models | 20:30 | |
and for that matter, in most of the monetarists models. | 20:34 | |
So that's the general view that I take. | 20:39 | |
Now, I think that the money matters | 20:43 | |
and money matters in many ways. | 20:46 | |
I think, for example, that changes | 20:49 | |
in the supply of money have short run | 20:53 | |
repercussions in the interest rate. | 21:00 | |
If money is kept in a very tight rein in the short period, | 21:01 | |
that tends to raise interest rates. | 21:05 | |
That's a view which the monetarists sold. | 21:10 | |
The monetarists also believe | 21:12 | |
that after a period of time, | 21:14 | |
the tightness of money slows down the economy | 21:16 | |
and that tends to undermine the demand for funds, | 21:21 | |
and so you get a reaction later, | 21:23 | |
which tends to depress interest rates. | 21:27 | |
However, that's something that I also believe. | 21:31 | |
That's something that every good Neo-Keynesian believes. | 21:34 | |
And I may say in my case, | 21:39 | |
I believe that all along, | 21:41 | |
that does not divide monetarism | 21:44 | |
from an eclectic position. | 21:47 | |
Let's take another issue that | 21:49 | |
is sometimes misjudged, I believe, in this matter. | 21:52 | |
The money rate of interest | 21:55 | |
is what you get when you give up a hundred pennies | 21:58 | |
and you get back at the end of the year 108 pennies. | 22:01 | |
That's eight percent money rate of interest. | 22:05 | |
But the real rate of interest | 22:08 | |
is what you get if give up a dollar, 100 pennies | 22:10 | |
in real purchasing power. | 22:13 | |
And what you can buy with the 108 pennies | 22:15 | |
that you get for that dollar a year later, | 22:19 | |
and if the price index is going up three percent, | 22:22 | |
then really, for each of your hundred pennies, | 22:25 | |
you've only got in real terms 105 pennies. | 22:27 | |
And so the real rate of interest | 22:30 | |
is the money rate of interest minus | 22:32 | |
the rate, percentage rate of price increase. | 22:36 | |
That's a fact which is emphasized by monetarists. | 22:40 | |
It's also a fact, which is emphasized by me. | 22:45 | |
I wrote some of the first articles in the modern era | 22:49 | |
on this subject back in 1937, | 22:54 | |
when simple-minded Keynesianism was rife. | 22:57 | |
So that too does not separate the monetarists | 23:02 | |
from the eclectic position. | 23:06 | |
I think, as does the MIT-FRB model, | 23:10 | |
which tries to trace the effects | 23:17 | |
of Federal Reserve policy on the economic system, | 23:20 | |
I think that changes in the money supply | 23:24 | |
have effects upon the overall economy | 23:27 | |
through changes in the rate of interest, | 23:30 | |
the cost of credit, and the availability of credit. | 23:33 | |
I do not believe that exhausts | 23:39 | |
the effects of the money supply | 23:41 | |
because there are other effects. | 23:43 | |
I think that there are effects such as | 23:46 | |
that the liquid worth, net worth of all assets goes up | 23:49 | |
if the rate of interests goes down | 23:56 | |
and the capitalization factor, the price earnings ratio | 23:58 | |
so to speak, that supplied to the earning streams | 24:01 | |
of assets is thereby raised. | 24:05 | |
I think that is an effect. | 24:09 | |
It's very hard for me to quantify that particular effect, | 24:11 | |
but I do try, when I believe that there is effect | 24:15 | |
to the stock of money to find out | 24:20 | |
what the effect is in terms of common sense. | 24:22 | |
Because I don't believe in any relationship. | 24:26 | |
Just because it's an empirical relationship. | 24:28 | |
It's true that I can find a relationship | 24:31 | |
between money supply and the GNP. | 24:35 | |
I can make some mediocre predictions | 24:38 | |
with that relationship. | 24:40 | |
But I can do that with the stock of credit. | 24:41 | |
And I'm told by people with New York Federal Reserve Bank, | 24:43 | |
who have made experiments paralleling those | 24:46 | |
at the Saint Louis Federal Reserve Bank | 24:49 | |
that they get even better fit | 24:51 | |
if they use the total stock of credit | 24:53 | |
instead of just the money supply. | 24:56 | |
However, I wouldn't believe in the stock of credit theory | 24:58 | |
just because it had a better fit | 25:02 | |
because it doesn't make a good sense to me | 25:04 | |
and similarly, I would not believe | 25:06 | |
in any simple-minded monetarist theory | 25:08 | |
just because somebody is able to get | 25:11 | |
a high correlation coefficient | 25:13 | |
in some earlier period. | 25:15 | |
Now, in the period ahead, | 25:19 | |
I expect there to be a slow down | 25:22 | |
in the rate of growth of the economy, | 25:25 | |
both in money terms gradually | 25:29 | |
and in real terms. | 25:33 | |
I attribute this, in part, | 25:36 | |
to the tight rein on the money supply, | 25:38 | |
which the Federal Reserve | 25:43 | |
has been maintaining all this year. | 25:44 | |
I see signs of it already in housing starts. | 25:46 | |
I see signs of it already in construction awards. | 25:48 | |
And I think we see signs of it | 25:53 | |
in local and state public expenditures. | 25:56 | |
These are effects that I expect, | 26:00 | |
effects that monetarists expect. | 26:03 | |
You cannot, on the basis of having those effects | 26:06 | |
actually develop, separate out | 26:09 | |
which of the theories is correct | 26:11 | |
because a person who believes only in interest rate effects | 26:13 | |
that money effects interest rates | 26:16 | |
and through interest rates, that affects the GNP | 26:18 | |
will point to that same slowdown | 26:20 | |
if it materializes and say, uh-huh, | 26:23 | |
that proves my theory. | 26:25 | |
Whereas a monetarist will say, | 26:26 | |
my theory also fits that effect. | 26:30 | |
And so, we'll have to wait, I think, | 26:33 | |
for another time when you get some differentiation | 26:35 | |
between the theories to adjudicate. | 26:40 | |
There'll be a lot more to talk about | 26:47 | |
in this connection | 26:49 | |
and in connection with the passing, | 26:50 | |
developing economic scene. | 26:52 | |
I would like in just a few seconds that I have left | 26:54 | |
to mention that when I spoke about | 26:58 | |
the behavior of municipal bond yields | 27:01 | |
in my last tape, I of course did not take into account | 27:03 | |
something which develops since that time, | 27:10 | |
namely, the tax reform is going to change the likelihood | 27:12 | |
that municipal bonds will be completely tax-exempt. | 27:16 | |
And so we are getting quite independently | 27:19 | |
of the factors that I was speaking about earlier. | 27:22 | |
We are getting a deterioration | 27:25 | |
of prices of municipal bonds, | 27:27 | |
particularly new ones, which may be less | 27:30 | |
tax exempt that old one | 27:32 | |
in comparison with other bonds. | 27:34 | |
We're still in the great guessing game | 27:38 | |
as to whether the churn has come | 27:41 | |
in the interest rate market. | 27:42 | |
Next time, we can take another look | 27:47 | |
at that particular problem. | 27:50 | |
- | Thank you, Professor Samuelson. | 27:52 |
If you have questions, | 27:54 | |
write Instructional Dynamics Incorporated, | 27:55 | |
166 East Superior Street, Chicago 60611. | 27:57 |
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