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Monetary Policy Cannot Do Much About Long-run Growth, All We Can Try To Do Is To Try To Smooth Out Periods Where The Economy Is Depressed Because Of Lack Of Demand

-Ben Bernanke

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Monetary Policy Cannot Do

Ben Bernanke

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Monetary Policy Cannot Do Much About Long-run Growth, All We Can Try To Do Is To Try To Smooth Out Periods Where The Economy Is Depressed Because Of Lack Of Demand

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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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If Current Trends Continue, The Typical U.s. Worker Will Be Considerably More Productive Several Decades From Now. Thus, One Might Argue That Letting Future Generations Bear The Burden Of Population Aging Is Appropriate, As They Will Likely Be Richer Than We Are Even Taking That Burden Into Account.

The American People Are Among The Most Productive In The World. We Have The Best Technologies. We Have - Great Universities. We Have Entrepreneurs.

The U.s. Government Has A Technology, Called A Printing Press (or, Today, Its Electronic Equivalent), That Allows It To Produce As Many U.s. Dollars As It Wishes At Essentially No Cost.

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House Prices Have Risen By Nearly 25 Percent Over The Past Two Years. Although Speculative Activity Has Increased In Some Areas, At A National Level These Price Increases Largely Reflect Strong Economic Fundamentals.

It Takes About Two And A Half Percent Growth Just To Keep Unemployment Stable.

It's True That The Federal Reserve Faces A Lot Of Political Pressure And Is Unpopular In Many Circles.

A Meritocracy Is A System In Which The People Who Are The Luckiest In Their Health And Genetic Endowment; Luckiest In Terms Of Family Support, Encouragement And, Probably, Income; Luckiest In Their Educational And Career Opportunities; And Luckiest In So Many Other Ways Difficult To Enumerate - These Are The Folks Who Reap The Largest Rewards.

I Don't See Much Evidence Of An Equity Bubble.

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The People Who Best Use Their Advantages, Or Overcome Adversity, And Work Honestly Are Those Most Worthy Of Admiration.

I Served Seven Years As The Chair Of The Princeton Economics Department Where I Had Responsibility For Major Policy Decisions, Such As Whether To Serve Bagels Or Doughnuts At The Department Coffee Hour.

Importantly, In The 1930s, In The Great Depression, The Federal Reserve, Despite Its Mandate, Was Quite Passive And, As A Result, Financial Crisis Became Very Severe, Lasted Essentially From 1929 To 1933.

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The Federal Reserve Will Not Monetize The Debt.

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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.

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Monetary Policy Cannot Do Much About Long-run Growth, All We Can Try To Do Is To Try To Smooth Out Periods Where The Economy Is Depressed Because Of Lack Of Demand

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