Arnold Kling

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Arnold Kling

  • Former economist Federal Reserve and Freddie Mac
  • Member Financial Markets Working Group

Arnold Kling is a member of the Mercatus Center’s Financial Markets Working Group.  As a member of the working group, Dr. Kling draws on his experience at Freddie Mac and the Federal Reserve to increase understanding of monetary policy, the regulation “anomaly,” and the inside workings of America's federal financial institutions.

Dr. Kling served as a senior economist at Freddie Mac from 1986-1994.  He was an economist on the staff of the Board of Governors of the Federal Reserve System from 1980-1986.  Previously, he started one of the first commercial websites on the World Wide Web, Homefair.  He has taught economics and statistics at Berman Hebrew Academy in Rockville, Maryland, and economic citizenship at George Mason University in Fairfax, Virginia.

Dr. Kling has authored three books, Learning Economics, a collection of essays on economic issues, Under the Radar, and Crisis of Abundance: Rethinking How We Pay for Health Care.  He co-authors EconLog with Brian Caplan, and he is a contributing editor for TCSDaily.  He has testified before Congress on the collapse of Fannie Mae and Freddie Mac.  He has been an adjunct scholar at the Cato Institute.

Dr. Kling earned his Ph.D. in economics from the Massachusetts Institute of Technology.

 

PUBLISHED RESEARCH

Research Paper/Study
Not What They Had in Mind: A History of Policies that Produced the Financial Crisis of 2008 image

Not What They Had in Mind: A History of Policies that Produced the Financial Crisis of 2008

Arnold Kling | Sep 2009
This paper looks at the roots of the current crisis through an analytical framework of bad bets, excessive leverage, domino effects, and 21st-century bank runs. It shows that broad policy areas—including housing policy, capital regulations for banks, industry structure and competition, autonomous financial innovation, and monetary policy—affected elements of this framework to varying, but important degrees. Ultimately, this special study seeks to draw meaningful lessons for policymakers by understanding the complex history, evolution, and integrated nature of financial regulations.

WORKING PAPERS

Guessing the Trigger Point for a U.S. Debt Crisis image

Guessing the Trigger Point for a U.S. Debt Crisis

Arnold Kling | Aug 24, 2010
This paper explores the possibility of the U.S. experiencing a debt crisis in the medium run, meaning somewhere between 2015 and 2035. It is impossible to state precisely the trigger point for a crisis. At best, we can make guesses about some of the key parameters.
Simple Solutions to America’s Long-Term Budgetary Challenges image

Simple Solutions to America’s Long-Term Budgetary Challenges

Arnold Kling | Mar 26, 2010
In light of the looming fiscal problems facing the United States, there will have to be changes to entitlement programs. The proposals in this paper will be designed to keep the total of Social Security, Medicare, and Medicaid below 10 percent of GDP in 2020 and 2030. Assuming that revenues and other spending follow the projected path, holding Social Security, Medicare, and Medicaid at 10 percent of GDP should be sufficient to stabilize the fiscal outlook.

POLICY BRIEFS

The Unintended Consequences of International Bank Capital Standards image

The Unintended Consequences of International Bank Capital Standards

Arnold Kling | Apr 2009
This Mercatus on Policy reviews the unintended consequences of the Basel capital standards, as well as the failure of those standards to achieve the desired result of systemic stability. The fundamental lesson is that capital standards should be viewed in the context of a dynamic process in which the ability of standards to produce desirable behavior necessarily degrades over time.

TESTIMONY & COMMENTS

Congressional Testimony

Hearing on the Home Affordable Modification Program

Testimony before the U.S. House of Representatives Subcommittee on Housing and Community Opportunity
Arnold Kling | Apr 14, 2010
Since the financial crisis in 2008, fueled by the bubble in the housing market, many homeowners are still facing foreclosures, as they can no longer afford their monthly mortgage payments. The government has tried to establish programs that will help home owners to stay in their homes. In this testimony Dr. Kling critiques the latest government program, the Home Affordable Modification Program, and compares home purchasing to the speculative nature of the decisions entrepreneurs make when they embark on business ventures.
Congressional Testimony

Collapse of Fannie Mae and Freddie Mac

Arnold Kling | Dec 09, 2008
Arnold Kling, a member of Mercatus's Financial Markets Working Group, testified on the role of Fannie Mae and Freddie Mac in the current financial crisis before the House Committee on Oversight and Government Reform on December 9, 2008. In his testimony, Dr. Kling offered a series of lessons from the collapse…

MEDIA CLIPPINGS

The Atlantic

How Expensive Would Mortgages Be Without Government Backing?

Arnold Kling | Aug 19, 2010
Arnold Kling is mentioned regarding the effect of a government guarantee on mortgage interest rates at The Atlantic.
THE AMERICAN

When Labor Is Capital: The Limits of Keynesian Policy

Arnold Kling | Aug 06, 2010
Arnold Kling writes in The American and Real Clear Politics on the limits of Keynesian policy.
The New York Times Online

Liberal Elites and Conservative Illusions

Arnold Kling | Jul 23, 2010
Arnold Kling’s Econlog post on neo-reactionaries is cited in the The New York Times and Instapundit
MORE MEDIA CLIPPINGS