Check out this article by Bloomberg News highlighting Ben Bernanke's discussion of how the FED is going to stimulate the economy. This post is a great follow up to the pervious post about Bernanke being a market mover. The article is a perfect overview of what stimulus policy in the United States looks like today. Videos of Bernanke speaking to the House Financial Services Committee on February 27th are also included on the link.
What did you learn from the article? With all the material on monetary/fiscal policy we have been reading and discussing, what do you think is a viable solution? Do you think Koo's argument against monetary policy holds here?
From this article, it seems as if the Fed is doing everything possible to spur economic growth, and they plan on keeping interest rates near zero until unemployment shrinks to about 6.5%. Another issue at hand is the asset purchasing policy the Fed is employing. No other country has ever done this except for Japan, so there is not a lot of historical context to see what steps should be taken or avoided once the economy hopefully picks up.
ReplyDelete