Bernanke: U.S. is not Japan, and I have not changed my mind

April 26, 2012

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Of all the questions Federal Reserve Chairman Ben Bernanke was asked during his press conference on Wednesday, one appeared to pique his interest in particular: Was he being less aggressive as central bank chairman than the advice he dished out to Japan as an academic in the 1990s would prescribe?

Political economy and the euro

February 8, 2010

The reality of  ‘political economy’  is something that irritates many economists – the ”purists”, if you like. The political element is impossible to model;  it often flies in the face of  textbook economics;  and democratic decision-making and backroom horse trading can be notoriously difficult to predict and painfully slow.  And political economy is all pervasive in 2010 – Barack Obama’s proposals to rein in the banks is rooted in public outrage; reading China’s monetary and currency policies is like Kremlinology; capital curbs being introduced in Brazil and elsewhere aim to prevent market overshoot; and British budgetary policies are becoming the political football ahead of this spring’s UK election. The list is long, the outcomes uncertain, the market risk high.

The Case for a Dovish Fed

October 12, 2009

The Federal Reserve has gone on the offensive to sell its exit strategy to investors and the public, in the hopes that it can stall an increase in inflation expectations. The effort was first launched by Fed Board Governor Kevin Warsh, who argued in a Wall Street Journal editorial, followed by a speech, that when the time came for Fed tightening, policymakers might have to move quickly. Even Bernanke, whose Great Depression expertise usually pegs him as a dove, was particularly meticulous about describing the Fed’s stimulus-withdrawal tools this week, sending the bond market into a tailspin.

Krugman for Treasury Secretary?

March 25, 2009

On Monday, Nobel-laureate Paul Krugman wrote that Treasury Secretary Timothy Geithner’s plan was not only doomed to fail, it was, in fact, filling him with despair.

Worried about deflation? Don’t be so stupid

November 21, 2008

Posted by Alister Bull

Highly regarded Federal Reserve historian Allan Meltzer has some sharp words for journalists calling for his views on whether the United States is heading for a Japan-style bout of deflation.