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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

It takes about two and a half percent growth just to keep unemployment stable.
BEN BERNANKE

Growth Two Unemployment
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 risk that the economy has entered a substantial downturn appears to have diminished over the past month or so.
BEN BERNANKE

Months Past Risk
If your uniform isn’t dirty, you haven’t been in the game.
BEN BERNANKE

Dirty Game Graduation
The benefit of appointing a hawkish central banker is the increased inflation-fighting credibility that such an appointment brings.
BEN BERNANKE

Bankers Benefit Fighting
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
The lesson of history is that you do not get a sustained economic recovery as long as the financial system is in crisis.
BEN BERNANKE

Lessons Long Recovery
The people who best use their advantages, or overcome adversity, and work honestly are those most worthy of admiration.
BEN BERNANKE

Adversity People Use
It must be awfully frustrating to get a small raise at work and then have it all eaten by a higher cost of commuting.
BEN BERNANKE

Cost Frustrating Raises
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
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
It’s true that the Federal Reserve faces a lot of political pressure and is unpopular in many circles.
BEN BERNANKE

Circles Political Pressure
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
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
Every effort needs to be made to try and offset the costs of Katrina and Rita by reductions in other government programs, especially those that are wasteful, duplicative and ineffective.
BEN BERNANKE

Effort Government Trying
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

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.

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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.

Related Topics

Popular Authors

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