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The sources of deflation are not a mystery. Deflation is in almost all cases a side effect of a collapse of aggregate demand.. a drop in spending so severe that producers must cut prices on an ongoing basis in order to find buyers.

Ben Bernanke

…the Federal Reserve has the capacity to operate in domestic money markets to maintain interest rates at a level consistent with our economic goals
BEN BERNANKE

Goal Investing Levels
Economics is a very difficult subject. I’ve compared it to trying to learn how to repair a car when the engine is running.
BEN BERNANKE

Car Running Trying
If you want to understand geology, study earthquakes. If you want to understand the economy, study the Depression.
BEN BERNANKE

Depression Earthquake Want
The Federal Reserve will not monetize the debt.
BEN BERNANKE

Debt Federal Reserve Reserves
I generally leave the details of fiscal programs to the Administration and Congress. That’s really their area of authority and responsibility, and I don’t think it’s appropriate for me to second guess.
BEN BERNANKE

Details Responsibility Thinking
The American people are among the most productive in the world. We have the best technologies. We have – great universities. We have entrepreneurs.
BEN BERNANKE

Entrepreneur People Technology World
The GSEs are adequately capitalized. They are in no danger of failing.
BEN BERNANKE

Capitalized Danger Failing
How much would you pay to avoid a second Depression?
BEN BERNANKE

Borrow Depression Great Pay
I am very proud of my nerd-dom.
BEN BERNANKE

Doms Nerd Proud
The amount of currency in circulation is not changing. The money supply is not changing in any significant way.
BEN BERNANKE

Currency Significant Way
One might as well try to perform brain surgery with a sledgehammer.
BEN BERNANKE

Brain might Trying
The basic prescription for preventing deflation is therefore straightforward, at least in principle: Use monetary and fiscal policy as needed to support aggregate spending.
BEN BERNANKE

Business Principle Support
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 BERNANKE

Depression Financial Great Result
Achieving price stability is not only important in itself, it is also central to attaining the Federal Reserve’s other mandate objectives of maximum sustainable employment and moderate long-term interest rates.
BEN BERNANKE

Employment Important Long
It takes about two and a half percent growth just to keep unemployment stable.
BEN BERNANKE

Growth Two Unemployment
The risk that the economy has entered a substantial downturn appears to have diminished over the past month or so.
BEN BERNANKE

Months Past Risk

The sources of deflation are not a mystery. Deflation is in almost all cases a side effect of a collapse of aggregate demand.. a drop in spending so severe that producers must cut prices on an ongoing basis in order to find buyers.

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The sources of deflation are not a mystery. Deflation is in almost all cases a side effect of a collapse of aggregate demand.. a drop in spending so severe that producers must cut prices on an ongoing basis in order to find buyers.

Related Topics

Popular Authors

More Ben Bernanke Quotes