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 BERNANKEIt takes about two and a half percent growth just to keep unemployment stable.
More Ben Bernanke Quotes
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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.
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It takes about two and a half percent growth just to keep unemployment stable.
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The GSEs are adequately capitalized. They are in no danger of failing.
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If you are not happy with yourself, even the loftiest achievements won’t bring you much satisfaction.
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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 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.
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Indeed, in general, healthy investment returns cannot be sustained in a weak economy, and of course it is difficult to save for retirement or other goals without the income from a job.
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The central bank needs to be able to make policy without short term political concerns.
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Education – lifelong education for everyone – from toddlers to workers well advanced in their careers – is indeed an excellent investment for individuals and society as a whole.
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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.
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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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Among the largest banks, the capital ratios remain good and I don’t expect any serious problems . . . . among the large, internationally active banks that make up a very substantial part of our banking system.
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I am confident that we will meet whatever challenges the future may bring.
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I’d throw dollars out of helicopters if I had to, to stimulate the economy.
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If Wall Street crashes, does Main Street follow? Not necessarily.
BEN BERNANKE