U.S. Markets closed

Harvard Business Dean: The post-crisis monetary policy is ‘running out of runway’

Ahead of this month’s Fed meeting, Harvard Business School (HBS) Dean Nitin Nohria says that policy changes from the government are urgent.

“We’re living at a point in which the one gear that we seem to have been using post the financial crisis, which is quantitative easing, seems to be running out of runway,” Nohria said. “There’s just not that much more room left. So once I think we get past these short-term quantitative easing measures and start to think more about fundamentals, that the mood shifts to fiscal policy.”

In its recently-released report on competitiveness, HBS professors, led by Michael Porter, stressed the urgency of key structural reform, especially regarding corporate tax policy.

Politicians are completely missing the key issues

Nohria said politicians are latching onto the ideas they find most convenient, as opposed to working to solve underlying issues.

“You think about America today, it’s not that it’s a world in which you can say it’s only strengths and only weaknesses. We have some of both,” Nohria said. “In politics, you latch onto the argument that you want to make, so each side can make an argument.”

In contrast, HBS is trying to take an objective approach, he said.

“I think that scholars like us and schools like ours have the responsibility that we have since we’re not actually beholden to any political party,” he said. “From the very first day, one of our goals in this study was to make sure that it was a non-partisan study. If you look at surveys, it’s quite hard to figure out where people with different political orientations lean. And we’ve tried to find the things that people on both sides of the political spectrum would agree with.”

Politics aside, the study has focused on what works well in America and what needs to be fixed.

“We have to stop being in this blame game,” Nohria said.

With the aim of getting input from people from all parts of the political spectrum, the study was grounded by a survey of alumni as well as the general public. Nohria said he has focused on answering important questions and aims for these to be implemented in policy measures.

For more on the US competitiveness study, please see below:

Harvard economist never thought his new study would take him where it did

Harvard professor identifies the ‘worst nightmare’ in America right now

Harvard study singles out a game-changing economic opportunity: TAX REFORM

There’s a silver lining behind the dark clouds hanging over US businesses

Harvard Business dean tells us what this huge 5-year study is all about

How improved infrastructure could end America’s vicious cycle of poverty

Some companies have taken the next obvious step to filling jobs that sit vacant

There’s one piece of tax reform that would have a real impact with little resistance

America’s outdated education system isn’t producing the workers companies need

Revitalizing small businesses is key to drive America’s economic growth