The central bank needs to be able to make policy without short term political concerns.
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
More Ben Bernanke Quotes
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Economics is a very difficult subject. I’ve compared it to trying to learn how to repair a car when the engine is running.
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Monetary policy cannot do much about long-run growth, all we can try to do is to try to smooth out periods where the economy is depressed because of lack of demand
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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.
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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.
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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.
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Nobody really understands gold prices and I don’t pretend to understand them either.
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The economist John Maynard Keynes said that in the long run, we are all dead. If he were around today he might say that, in the long run, we are all on Social Security and Medicare.
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While rising delinquencies and foreclosures will continue to weigh heavily on the housing market this year, it will not cripple the U.S.
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In fact, the world needs more nerds.
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The more important reason is that the research itself provides an important long-run perspective on the issues that we face on a day-to-day basis.
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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.
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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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It takes about two and a half percent growth just to keep unemployment stable.
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The Federal Reserve will not monetize the debt.
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The impact on the broader economy and financial markets of the problems in the subprime markets seems likely to be contained.
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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.
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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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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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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.
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Although low inflation is generally good, inflation that is too low can pose risks to the economy – especially when the economy is struggling.
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It is not the responsibility of the Federal Bank – nor would it be appropriate – to protect lenders and investors from the consequences of their decisions
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It’s true that the Federal Reserve faces a lot of political pressure and is unpopular in many circles.
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If you want to understand geology, study earthquakes. If you want to understand the economy, study the Depression.
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The American people are among the most productive in the world. We have the best technologies. We have – great universities. We have entrepreneurs.
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So it’s important, as it affects overall levels of production and employment in the U.S. There are many domestic industries doing well in the United States, notwithstanding a strong dollar.
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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.
BEN BERNANKE