Word: okun
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...idea calls for setting up numerical standards similar to the guidelines used in the early 1960s to restrain wages and prices. Other steps under study: two kinds of TIPS or tax-based income policies that must be passed by Congress. One was devised by Economist Arthur Okun of the Brookings Institution, the other by Henry Wallich, a member of the Federal Reserve Board. Okun's plan would give tax credits to workers and employers who hold down wages and prices. Wallich's idea is to impose tax penalties on those firms granting inflationary pay boosts or setting excessive...
...others argue that the Federal Reserve's tight money policy is making a recession much more likely. In a forecast released last week, Economist Arthur Okun, a senior fellow at Washington's Brookings Institution, warns that a soft landing would be impossible in a "very soggy economy" and charges that the Fed's moves to push up interest rates are creating a "very severe risk of recession" later this year or early...
...Okun puts the chance of an approaching downturn at 55% and urges that carrot-and-stick income tax policies be adopted to encourage labor and management to hold down wage and price raises. Unions and companies that settled for low increases would pay reduced taxes, while those that helped aggravate inflation would suffer tax penalties. Such an approach has been used successfully in Britain, where in the past year and a half inflation has plunged from some 20% to about 8%. But with the Administration's entire tax policy tangled up in Congress, Okun admits that his proposal...
...Washington economic consultant: "The most important thing in holding down inflation is to get business and labor's cooperation on prices and wages." Everybody agrees that winning labor support is remote, especially after George Meany last week thumbed his nose at Carter's importuning for restraint. Arthur Okun, a senior fellow at the Brookings Institution, notes that the rate of wage increases has jumped more than a full point in a year, to 8.3%. He contends that the Administration must set an example-such as holding firm on wage increases for federal employees-that will stiffen the spines...
...appear. Shortages of skilled labor are cropping up; the amount of overtime is running close to that of 1973, when plants were operating at close to full effective capacity. Considering that, most members of the board favored a reduction in Carter's proposed $25 billion tax cut. Noted Okun: "What looked to me like a reasonable fiscal policy in December, and indeed a month ago, looks too stimulative today." The same thought dawned on the Administration when it agreed at week's end with congressional leaders to trim the cut to $20 billion and roll it back from...