Importantly, in the 1930s, in the Great Depression, the Federal Reserve, despite its mandate, was quite passive and, as a result, financial crisis became very severe, lasted essentially from 1929 to 1933.
BEN BERNANKEThe risk that the economy has entered a substantial downturn appears to have diminished over the past month or so.
More Ben Bernanke Quotes
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Among the largest banks, the capital ratios remain good and I don’t expect any serious problems . . . . among the large, internationally active banks that make up a very substantial part of our banking system.
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The benefit of appointing a hawkish central banker is the increased inflation-fighting credibility that such an appointment brings.
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Although low inflation is generally good, inflation that is too low can pose risks to the economy – especially when the economy is struggling.
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If I am confirmed, I am confident that my colleagues on the Federal Open Market Committee and I will maintain the focus on long-term price stability as monetary policy’s greatest contribution to general economic prosperity and maximum employment.
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In the future, my communications with the public and with the markets will be entirely through regular and formal channels.
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A collapse in U.S. stock prices certainly would cause a lot of white knuckles on Wall Street. But what effect would it have on the broader U.S. economy? If Wall Street crashes, does Main Street follow? Not necessarily.
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Over the years, the U.S. economy has shown a remarkable ability to absorb shocks of all kinds, to recover, and to continue to grow.
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If you are asking me if I would advocate that the Chinese go to greater flexibility in their exchange rate, I certainly would.
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Under current law, on January 1, 2013, there’s going to be a massive fiscal cliff of large spending cuts and tax increases.
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I don’t fully understand movements in the gold price.
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I and others were mistaken early on in saying that the subprime crisis would be contained. The causal relationship between the housing problem and the broad financial system was very complex and difficult to predict.
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In fact, the world needs more nerds.
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The basic prescription for preventing deflation is therefore straightforward, at least in principle: Use monetary and fiscal policy as needed to support aggregate spending.
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Weaker currencies abroad mean a strong dollar, and a stronger dollar, together with a weak global environment, is a drag on the U.S. econom.
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Economics is a highly sophisticated field of thought that is superb at explaining to policymakers precisely why the choices they made in the past were wrong. About the future, not so much.
BEN BERNANKE






