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April 21, 2005
Policy thought for the day
Given all the talk about soft landings as well as Greenspan's dire warning on the deficit today, I thought this would be a good way to sum up my thoughts at the moment.
Thanks to David Altig for the link. He has some more extensive quotes at his blog. The whole speech by Cleveland Fed President Sandra Pianalto is worth reading, but this really fits my mood concerning the day's discussion.
In the long run, a central bank cannot balance the government's budget, boost national saving, create more energy resources, or solve the many economic problems that we must confront. But a credible monetary policy will help smooth the adjustment to economic circumstances that come our way.
Precisely. Full stop.
Posted by William Polley at April 21, 2005 03:46 PM
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Comments
Yes - nice quote - that captures it - monetary policy matters - but it isn't the only game in town.
Posted by: rjw at April 23, 2005 03:21 PM
It isn't the only game in town, but it's all that the Fed can do.
Posted by: William Polley at April 23, 2005 06:50 PM
Agreed.
I read Bob Rubin's book recently and he described how he had weekly meetings with Greenspan and Larry Summers to discuss policy and the state of the world, often with no agenda (Oh to have been a fly on the wall). I haven't read Snow's book, but I wonder whether the current administration's ties are of the same sort?
Posted by: rjw at April 24, 2005 09:40 AM