Raghuram Rajan Quotes

Negative interest rates have been employed by many, many central banks.

After a long period in which the desired direction for inflation was always downward, the industrialized world's central banks must today try to avoid major changes in the inflation rate in either direction.

The central focus of what we are doing at the Fed is to keep inflation from accelerating - and preferably decelerating.

Well, I think as long as people are talking about stimulus, I think the Fed will be thinking about cutting rates because monetary policy is the better way to go because you can turn it on and turn it off.

I never liked quantitative easing. It's misunderstood by almost everybody. Flattening the yield curve is not stimulative; flattening the yield curve is anti-stimulative.

I think the Fed is not designed to have effective tools to deal with the economy. It should settle for just controlling the money supply. And - if it insists, it can worry about inflation.

I have never believed that central banks should have rigid inflation targeting. That is not a good thing to stabilize. There is nothing in economic theory to back this.

Monetary policy will, as always, respond to the economy's twists and turns so as to promote, as best as we can in an uncertain economic environment, the employment and inflation goals.

By putting downward pressure on interest rates, the Fed is trying to make financial conditions more accommodative - supporting asset values and lower borrowing costs for households and businesses and thus encouraging the spending that spurs job creation and a stronger recovery.

The Federal Reserve has an official commitment to two different policies. One is to prevent inflation from getting too high. The second is to maintain high employment... the European Central Bank has only the first. It has no commitment to keep employment up.

The government must do all it can to help reduce interest rates for business.

I'm just opposed to a pure inflation-only mandate in which the only thing a central bank cares about is inflation and not employment.

We pay some price when necessary to bring down inflation but that price is temporary and is not large relative to the permanent gain from reduced inflation.

The Fed is totally open.

The Federal Open Market Committee (FOMC) is committed to policies that promote maximum employment and price stability, consistent with our mandate from Congress.

The reason inflation was brought down to manageable levels, by the time of Ronald Reagan's re-election, was directly attributable to Jimmy Carter's very courageous act, hiring a Federal Reserve chair, with the charge to induce a recession. That recession was probably the reason he didn't win a second term.

There are limits to monetary policy.

It would be helpful if someone would lay out exactly the economic mechanism that gets us from yet lower interest rates to actual economic activity.

The history of interest rates is really the history of inflation. When inflation is high, interest rates are high, and when inflation is low, interest rates are low.

For the first time the committee [Federal Reserve] was using communication — mere words — as its primary monetary policy tool.

The greatest economic power might in fact remain in the hands of the Federal Reserve. Economists credit the Fed's policy of keeping interest rates at historic lows with helping to pump up the economy and bring unemployment down.

During the Greenspan-Bernanke era, the Fed has embraced the view that stability in the economy and stability in prices are mutually consistent. As long as inflation remains at or below its target level, the Fed's modus operandi is to panic at the sight of real or perceived economic trouble and provide emergency relief.

The role of monetary policy is to smooth out business cycles by promoting steady inflation and healthy labor markets, but modern central bankers have taken an activist turn.

When you have steady inflows and global central banks hell-bent on stoking credit activity and inflation, money will flow into the most attractive areas.

For people who grew up in the last four decades of the 20th century, it is hard to grasp the concept of negative interest rates. How is it even possible? If interest rates are the price of money, is the marketplace broadcasting that money is on sale? Are we just giving it away?