Macroeconomic Management Quotes

If Australia finds it has a strong Australian dollar, and it has higher unemployment, then it would have to respond, and that would either be by increasing domestic demand or by weakening its own currency.

Low and stable inflation in many countries is an important accomplishment that will continue to bring significant benefits.

The boom, not the slump, is the right time for austerity at the Treasury.

A beautiful deleveraging balances the three options. In other words, there is a certain amount of austerity, there is a certain amount of debt restructuring, and there is a certain amount of printing of money. When done in the right mix, it isn't dramatic.

The Federal Reserve is incapable of accomplishing its stated objectives.

The Fed contributed to the financial crisis, keeping interest rates too low for too long. I give them credit for responding and stabilizing the economy and the financial sector during the crisis. But then they tried to do too much with quantitative easing that went on forever, just dramatically exploding their balance sheets.

Poland is one of the few countries that can afford to conduct a conventional monetary policy and that means we have to act against the buildup of imbalances in the economy.

Japan has introduced fiscal stimulus five times in the past seven or eight years and each time it's been a failure and that's not a surprise. Fiscal stimulus is not stimulating in and of itself.

The Federal Reserve... is in the position of the chaperone who has ordered the punch bowl removed just when the party was really warming up.

The Fed's ability to raise and lower short-term interest rates is its primary control over the economy.

The Fed's job is not to stall growth or to prevent economic 'overheating.' It is to keep prices stable and the dollar a strong and reliable currency.

The OECD should promote everything that's consistent with its mandate, which is to make the world economy work better.

New policy tools, which helped the Federal Reserve respond to the financial crisis and Great Recession, are likely to remain useful in dealing with future downturns.

The good thing about the IMF is there is no European politics involved.

The basic prescription for preventing deflation is therefore straightforward, at least in principle: Use monetary and fiscal policy as needed to support aggregate spending, in a manner as nearly consistent as possible with full utilization of economic resources and low and stable inflation. In other words, the best way to get out of trouble is not to get into it in the first place.

The case against a fully independent central bank is strong indeed.

During the 1970s, inflation expectations rose markedly because the Federal Reserve allowed actual inflation to ratchet up persistently in response to economic disruptions - a development that made it more difficult to stabilize both inflation and employment.

My bottom line is that monetary policy should react to rising prices for houses or other assets only insofar as they affect the central bank's goal variables - output, employment, and inflation.

It is the central bank governor, unlike other regulators or government secretaries, who has command over significant policy levers and has to occasionally disagree with the most powerful people in the country.

If we want to contrast what we have done in the past few years on delivery with what the right hon. and learned Gentleman delivered, let us remember the interest rates at 10 per cent. to 15 per cent., the 1.5 million fewer people in work, the boom and the bust and the borrowing at 8 per cent.

Avoiding inflation is not an absolute imperative but rather is one of a number of conflicting goals that we must pursue and that we may often have to compromise.

Mr. Greenspan did a very good job in the early 1990's. But recently he's fallen prey to this crazy theory that prosperity causes inflation. So they're trying to slow the economy down by raising interest rates. It's like a doctor saying you're in great health, so we have to make you sick a little bit. It's a bizarre theory. It's going to hurt our economy.

For policy makers interested in using tax policy to stimulate investments or especially to smooth business cycle fluctuations, the results are not promising.

In a democracy the responsibility for the Government's economic policies, which so affect the economy, normally rests with the elected representative of the people: in our case, with the President and the Congress. If these two follow economic policies inimical to the general welfare, they are accountable to the people for their actions on election day. With Federal Reserve independence, however, a body of men exist who control one of the most powerful levers moving the economy and who are responsible to no one.

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.