Federal Reserve's Miran sees deregulation easing monetary policy
Federal Reserve Board member Miran stated that sweeping deregulation in the United States will significantly boost competition, productivity, and potential growth. This development supports a continued easing of restrictive monetary policy by allowing faster economic growth without upward pressure on inflation.
Greece's blueprint for supply-side growth
Federal Reserve Board member Miran highlighted Greece's successful deregulation efforts, which fostered economic growth and improved monetary policy transmission.
He emphasized that well-targeted reforms expand the economy's productive capacity, leading to sustained growth without inflation.
Miran noted the challenge for central bankers in incorporating deregulation into economic outlooks due to measurement difficulties.
He cited progress in using AI and natural language processing to quantify regulations, with some projects showing a substantial drop in rules in 2025.
Deregulation's deflationary impulse
Miran explained that deregulation reduces productivity costs, putting downward pressure on prices.
He projected that current U.S. deregulation, potentially eliminating 30 percent of restrictions by 2030, could lead to a cumulative 3 percent drag on the consumer price level.
This significant productivity shock supports a more accommodative monetary policy stance.
Miran noted that if deregulation boosts potential output above actual, cutting rates is the appropriate response, while also considering its potential to raise the neutral rate of interest.