To be sure, the provision of liquidity alone can by no means solve the problems of credit risk and credit losses; but it can reduce liquidity premiums, help restore the confidence of investors, and thus promote stability.
Deflation is defined as a general decline in prices, with emphasis on the word 'general.'
Economic science concerns itself primarily with theoretical and empirical generalizations about the behavior of individuals, institutions, markets, and national economies. Most academic research falls in this category.
If you want to understand geology, study earthquakes. If you want to understand the economy, study the Depression.
Economic engineering is about the design and analysis of frameworks for achieving specific economic objectives.
The Fed needs an approach that consolidates the gains of the Greenspan years and ensures that those successful policies will continue - even if future Fed chairmen are less skillful or less committed to price stability than Mr. Greenspan has been.
Central bankers got it right in the United States in 1987 when they avoided deflationary pressures as well as serious trouble in the banking system.
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.
Clear communication is always important in central banking, but it can be especially important when economic conditions call for further policy stimulus but the policy rate is already at its effective lower bound.
In the past, Federal Reserve chairmen have not generally gone directly to the public.
Achieving price stability is not only important in itself, it is also central to attaining the Federal Reserve's other mandate objectives of maximum sustainable employment and moderate long-term interest rates.
As we try to make the financial system safer, we must inevitably confront the problem of moral hazard.
Identity theft is a serious crime that affects millions of Americans each year.
A little humility never hurts.
Small businesses have played an important role in fueling past economic recoveries.
Following an extended boom in housing, the demand for homes began to weaken in mid-2005. By the middle of 2006, sales of both new and existing homes had fallen about 15 percent below their peak levels. Homebuilders responded to the fall in demand by sharply curtailing construction.
The decline in home equity makes it more difficult for struggling homeowners to refinance and reduces the financial incentive of stressed borrowers to remain in their homes.
Every effort needs to be made to try and offset the costs of Katrina and Rita by reductions in other government programs, especially those that are wasteful, duplicative and ineffective.
Aggregate statistics can sometimes mask important information.
All the Federal Reserve can do is make loans against collateral.
The Federal Reserve can only buy Treasuries and agencies, and moreover quantitative easing typically involves buying longer-term Treasuries and agencies in terms of bills, for example.
Many savers are also homeowners; indeed, a family's home may be its most important financial asset. Many savers are working, or would like to be.
History has demonstrated time and again the inherent resilience and recuperative powers of the American economy.
History proves... that a smart central bank can protect the economy and the financial sector from the nastier side effects of a stock market collapse.
One would be forgiven for concluding that the assumed benefits of financial innovation are not all they were cracked up to be.
To the extent that bank panics interfere with normal flows of credit, they may affect the performance of the real economy.
Investment banks manage to go bankrupt through their investment-banking activities, commercial banks manage to go bankrupt through their commercial-banking activities.
When historical relationships are taken into account, it is difficult to ascribe the house price bubble either to monetary policy or to the broader macroeconomic environment.
The economist John Maynard Keynes said that in the long run, we are all dead. If he were around today he might say that, in the long run, we are all on Social Security and Medicare.
You want to put the fire out first and then worry about the fire code.
The central bank needs to be able to make policy without short term political concerns.
I don't think there are any students who should not be exposed to a basic financial literacy course.
Now that I'm a civilian again, I can once more comment on economic and financial issues without my words being put under the microscope by Fed watchers.
To be sure, faster growth in nominal labor compensation does not necessarily portend higher inflation.
Actually, I'm a Republican.
The Federal Reserve's job is to do the right thing, to take the long-run interest of the economy to heart, and that sometimes means being unpopular. But we have to do the right thing.
