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If you want to understand geology, study earthquakes. If you want to understand the economy, study the Depression.

Ben Bernanke

We’ve never had a decline in house prices on a nationwide basis. So, what I think what is more likely is that house prices will slow, maybe stabilize, might slow consumption spending a bit. I don’t think it’s going to drive the economy too far from its full employment path, though.
BEN BERNANKE

Employment House Thinking
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

Cutting Ongoing Order
The central bank needs to be able to make policy without short term political concerns.
BEN BERNANKE

Able Needs Political
It’s the price of success: people start to think you’re omnipotent.
BEN BERNANKE

People Price Success Thinking
The crisis and recession have led to very low interest rates, it is true, but these events have also destroyed jobs, hamstrung economic growth and led to sharp declines in the values of many homes and businesses.
BEN BERNANKE

Growth Home Jobs
In fact, the world needs more nerds.
BEN BERNANKE

Needs Nerd World
One might as well try to perform brain surgery with a sledgehammer.
BEN BERNANKE

Brain might Trying
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
If Wall Street crashes, does Main Street follow? Not necessarily.
BEN BERNANKE

Crash Doe Wall
…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 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
I served seven years as the chair of the Princeton economics department where I had responsibility for major policy decisions, such as whether to serve bagels or doughnuts at the department coffee hour.
BEN BERNANKE

Coffee Responsibility Years
[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
I’d throw dollars out of helicopters if I had to, to stimulate the economy.
BEN BERNANKE

Dollars Economy Helicopters
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
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

If you want to understand geology, study earthquakes. If you want to understand the economy, study the Depression.

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If you want to understand geology, study earthquakes. If you want to understand the economy, study the Depression.

Related Topics

Popular Authors

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