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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 Bernanke

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
I don’t see much evidence of an equity bubble.
BEN BERNANKE

Bubbles Equity Evidence
Life is amazingly unpredictable; any 22-year-old who thinks they know where they will be in 10 years, much less in 30, is simply lacking imagination.
BEN BERNANKE

Imagination Thinking Years
The impact on the broader economy and financial markets of the problems in the subprime markets seems likely to be contained.
BEN BERNANKE

Financial Impact Problem
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.
BEN BERNANKE

Incentives Safety Use
It’s the price of success: people start to think you’re omnipotent.
BEN BERNANKE

People Price Success Thinking
Under current law, on January 1, 2013, there’s going to be a massive fiscal cliff of large spending cuts and tax increases.
BEN BERNANKE

Cutting Important Law
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

Business Principle Support
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
In fact, the world needs more nerds.
BEN BERNANKE

Needs Nerd World
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
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

Best Economic Inflation Resources Way
A gold standard doesn’t imply stability in the prices of the goods and services that people buy every day, it implies a stability in the price of gold itself.
BEN BERNANKE

Gold People Standard
If you are asking me if I would advocate that the Chinese go to greater flexibility in their exchange rate, I certainly would.
BEN BERNANKE

Asking Chinese Rate
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.
BEN BERNANKE

Details Responsibility Thinking
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
BEN BERNANKE

Decision Economics Responsibility

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.

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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.

Related Topics

Popular Authors

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