Edmund Phelps Quotes

The difficulty for Mr. Obama will be when the public sees where his decisions lead - higher inflation, higher interest rates, higher taxes, sluggish growth, and a jobless recovery.

If you appoint me, I will raise interest rates and choke off the inflation, and that will have bad political repercussions for you.

We are all Keynesians now.

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

The government would also be wise to press on with its further measures to promote growth, as it will want to outperform the low figures in this outlook. This will mean delivering measures to ease money and credit and to stimulate demand.

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.

We believe that the Federal Reserve has to carry on with a progressive increase in interest rates as a consequence of the American economy.

We will not play with inflation. We are living a delicate moment. President Obama spoke to me today about the high unemployment affecting the United States. In this crisis period, when the developed nations are not recovering, it's prudent to maintain the established inflation target.

Should that worse scenario materialize, then most probably our propensity to increase interest rates will be weaker.

In the 1960s, and stretching back to the 1930s, it was felt by many economists that easy money is a reliable way to increase employment.

Governments can inflate their way out of debt, but that has consequences, doesn't it?

And that's the one thing that people do not understand is that we have very low interest rates and if those go back to historical levels or even go back to scary thoughts that they're back in the late '70s, early '80s, then that's going to really be hard to actually pay off those debts. It's going to be a - it's going to be a very big problem.

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.

The first step to prescribing the right medicine is to recognize the cause of the illness. And, when it comes to what is ailing the global economy, extreme monetary easing has been more cause than cure. The sooner we recognize that, the stronger and more sustainable the global economic recovery will be.

If we were to raise interest rates too steeply, and we were to trigger a downturn or contribute to a downturn, we have limited scope for responding, and it is an important reason for caution.

When inflation begins to rise, that's a situation we know how to deal with. When the economy is not doing well, and we're stuck at zero, that's one we don't know so much about - or we know about it that it's bad.

Whatever the economy needs to maintain itself, the government will do it.

Larger deficits are necessary and proper means to mitigate unemployment as the far greater evil in terms of human welfare.

In the '30s, the Keynesian stuff worked at least in the sense that you could print money without inflation because there was all this productivity growth happening. That's not going to work today.

Deflation can be particularly dangerous when a financial system is shaky, with household and corporate balance sheets in poor shape and banks undercapitalized and heavily burdened with bad loans.

The Obama administration's large and sustained increases in debt raise the specter of another financial crisis and large future tax increases, further chilling business investment and job creation.

Surely, the best and most effective measure is to get the economy moving and shorten the period of recession or slowdown. That's the rationale for Gordon Brown's 'fiscal stimulus' and it sounds like a good one to me.

If we did go into a recession, something that's always possible for the U.S. or Europe, we could lower interest rates and expand the money supply without worrying about the price of gold.

Actually, I have been very supportive of a very robust stimulus package from day one. I think this economy has to have a major stimulus initiative because the only group with liquidity is the federal government.

Double-digit inflation is a terrible thing - and it got up to 14 or 15 percent on a monthly basis for a while, shortly after I became chairman of the Fed.