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The more guidance a central bank can provide the public about how policy is likely to evolve the greater the chance that market participants will make appropriate inferences.

Ben Bernanke

The crisis in Europe has affected the US economy by acting as a drag on our exports, weighing on business and consumer confidence and pressuring US financial markets and institutions.
BEN BERNANKE

Acting Country Financial Lace
The risk exists that, with aggregate demand exhibiting considerable momentum, output could overshoot its sustainable path, leading ultimately in the absence of countervailing monetary policy action to further upward pressure on inflation.
BEN BERNANKE

Demand Path Risk
Speaking as somebody who has been happily married for 35 years, I can’t imagine any choice more consequential for a lifelong journey than the choice of a traveling companion.
BEN BERNANKE

Journey Travel Years
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
If you want to understand geology, study earthquakes. If you want to understand the economy, study the Depression.
BEN BERNANKE

Depression Earthquake Want
A gold standard doesn’t imply stability in the prices of the goods and services that people buy every day, it implies a stability in the price of gold itself.
BEN BERNANKE

Gold People Standard
The more guidance a central bank can provide the public about how policy is likely to evolve the greater the chance that market participants will make appropriate inferences.
BEN BERNANKE

Chance Guidance Inference
Under a cold turkey strategy, at each policy meeting the Federal Open Market Committee would make its best guess about where it ultimately wants the funds rate to be and would move to that rate in a single step.
BEN BERNANKE

Committee Country Moving
Nobody really understands gold prices and I don’t pretend to understand them either.
BEN BERNANKE

Gold Gold Price
The impact on the broader economy and financial markets of the problems in the subprime markets seems likely to be contained.
BEN BERNANKE

Financial Impact Problem
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

Choices Fields Past
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
We do not expect significant spillovers from the subprime market to the rest of the economy or to the financial system.
BEN BERNANKE

Economy Financial Significant
September and October of 2008 was the worst financial crisis in global history, including the Great Depression.
BEN BERNANKE

Financial October September
[Virtual Currencies] may hold long-term promise, particularly if the innovations Promote a faster, more secure and more efficient payment system.
BEN BERNANKE

Innovation Long Promise
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.
BEN BERNANKE

Employment Focus Long

The more guidance a central bank can provide the public about how policy is likely to evolve the greater the chance that market participants will make appropriate inferences.

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The more guidance a central bank can provide the public about how policy is likely to evolve the greater the chance that market participants will make appropriate inferences.

Related Topics

Popular Authors

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