The impact on the broader economy and financial markets of the problems in the subprime markets seems likely to be contained.
BEN BERNANKEThe 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.
More Ben Bernanke Quotes
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I don’t see much evidence of an equity bubble.
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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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In fact, the world needs more nerds.
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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.
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The Federal Reserve is not currently forecasting a recession.
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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.
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Our mission, as set forth by the Congress is a critical one: to preserve price stability, to foster maximum sustainable growth in output and employment, and to promote a stable and efficient financial system that serves all Americans well and fairly.
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The Federal Reserve will not monetize the debt.
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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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Both humanity’s capacity to innovate and the incentives to innovate are greater today than at any other time in history.
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If Wall Street crashes, does Main Street follow? Not necessarily.
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The benefit of appointing a hawkish central banker is the increased inflation-fighting credibility that such an appointment brings.
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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.
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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 don’t think that Chinese ownership of U.S. assets is so large as to put our country at risk economically.
BEN BERNANKE