NEW YORK (TheStreet) -- Harvard University economics professor Robert Barro appeared on BloombergTV's "Bloomberg Markets" on Thursday morning, to discuss central banks and his belief that global markets pay too much attention to the daily movements of these organizations.
"In terms of central banks, the Bank of England, the Federal Reserve, I think there is far too much attention paid to the daily actions of these banks," Barro said. "It's really quite a minor issue with respect to what is going on in the economy."
Barro believes that monetary policy is actually "a secondary matter."
The Fed and the BOE should have "moved in the opposite direction," according to Barro. He feels that they should have short term nominal interest rates at about a 2% to 3% range.
They should have "something more normal, rather than this crazy policy of being close to zero, or contemplating even negative nominal interest rates," he said. "There's really no reason for that kind of policy."
Moving on, BloombergTV's Mark Barton pointed out that in the past Barro has been opposed to stimulus spending and questioned if there would be any circumstances in which he would back stimulus spending.
"I think there are things that the government can do that are useful. Particularly some large scale infrastructure investments in the United States might be productive, but you want to think about that in terms of actual productivity," Barro said.
He believes the real issue has been a low productivity growth for several years, going back as far as 2010 in the U.S. or longer.
"The main reaction to the Great Recession in the U.S., particularly since 2009 [and] 2010 was a big increase in transfer payments. That is not something you think about in terms of stimulating productivity growth, which is the core problem in the U.S. and elsewhere," Barro said.