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

Currency Significant Way
Investment banks manage to go bankrupt through their investment-banking activities, commercial banks manage to go bankrupt through their commercial-banking activities.
BEN BERNANKE

Banking Banks Commercial Investment
The economic repercussions of a stock market crash depend less on the severity of the crash itself than on the response of economic policymakers, particularly central bankers.
BEN BERNANKE

Bankers Crash Economics
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.
BEN BERNANKE

Casual Financial Problem Relationship
The GSEs are adequately capitalized. They are in no danger of failing.
BEN BERNANKE

Capitalized Danger Failing
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.
BEN BERNANKE

Country Stock Street Wall White
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
Developments in financial markets can have broad economic effects felt by many outside the markets.
BEN BERNANKE

Development Economic Financial
With respect to their safety, derivatives, for the most part, are traded among very sophisticated financial institutions and individuals who have considerable incentive to understand them and to use them properly.
BEN BERNANKE

Incentives Safety Use
I don’t see much evidence of an equity bubble.
BEN BERNANKE

Bubbles Equity Evidence
Under current law, on January 1, 2013, there’s going to be a massive fiscal cliff of large spending cuts and tax increases.
BEN BERNANKE

Cutting Important Law
…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
The best approach here, if at all possible, is to use supervisory and regulatory methods to restrain undue risk-taking and to make sure the system is resilient in case an asset-price bubble bursts in the future.
BEN BERNANKE

Investing Risk Use
The U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost.
BEN BERNANKE

Government Technology Wish
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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Popular Authors

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

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