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 BERNANKEI 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.
More Ben Bernanke Quotes
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The Fed is totally open.
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How much would you pay to avoid a second Depression?
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In a manner as nearly consistent as possible with full utilization of economic resources and low and stable inflation. In other words, the best way to get out of trouble is not to get into it in the first place.
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I don’t think that Chinese ownership of U.S. assets is so large as to put our country at risk economically.
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It must be awfully frustrating to get a small raise at work and then have it all eaten by a higher cost of commuting.
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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.
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If your uniform isn’t dirty, you haven’t been in the game.
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I am very proud of my nerd-dom.
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A money-financed tax cut is essentially equivalent to Milton Friedman’s famous ‘helicopter drop’ of money.
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I’d throw dollars out of helicopters if I had to, to stimulate the economy.
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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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The lesson of history is that you do not get a sustained economic recovery as long as the financial system is in crisis.
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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.
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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.
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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.
BEN BERNANKE