Michael Spence Quotes

Monetary policy itself cannot sensibly be directed at reducing imbalances.

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.

Long before folks fretted the demise of 'quantitative easing,' I fretted its existence. It proved the reverse of its image, an antistimulus, and we've done okay not because of it, but despite it.

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.

We should be humble about our ability to stimulate the economy with monetary policy.

The country needed someone credible to fight inflation and Volker was the man for the job…. He understood that the government had to establish credibility in order to give policy makers flexibility when they needed it.

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 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 two important variables for the policy formulation are projected inflation and the output gap. There is no clear hidebound mathematics that we must give 'X' weight to inflation and 'Y' weight to growth and form the associated policy.

For too long, our nation has relied on low interest rates rather than undertaking the necessary long term necessary economic reforms.

No one thinks of controlling inflation of a continental-sized country by holding back municipal tariffs. Macroeconomic stability cannot be achieved through microeconomic intervention.

The goal of what Japan's central bank is doing is to create growth. If it actually creates growth, in the long run, it will lead to appreciation.

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

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.

Japan's experience suggests the importance of assessing the sustainability of price stability over a fairly long period, which many central banks have emphasized in recent years.

Popular as Keynesian fiscal policy may be, many economists are skeptical that it works. They argue that fine-tuning the economy is a virtually impossible task, and that fiscal-stimulus programs are usually too small, and arrive too late, to make a difference.

I don't accept as an article of faith that lots of short-term stimulus boosts the economy and gets us back on the long-term trajectory.

The staff at the Institute will present an analysis on how asset price fluctuations and subsequent structural adjustments influence sustained economic growth, based on Japan's experience since the second half of the 1980s.

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

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.

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.

Most of the policies that support robust economic growth in the long run are outside the province of the central bank.

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.

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.