Even though Ben Bernanke has not yet begun to fight:
…for five years running, the Fed under Chairman Ben S. Bernanke has had a remarkable track record of moving creatively, aggressively, and quickly to try to ease policy and get the U.S. economy on track — usually more creatively, more aggressively, and more quickly than those (surely NOT market monetarists) who spend their days watching the Fed thought possible.
Over the last two years, Bernanke and his colleagues at the Fed have been flummoxed that, years after the crisis and despite extraordinary interventions by the Fed, the U.S. economy has seemed stuck in a rut, unable to grow fast enough to accelerate back to full employment. Across Washington and at many of the world’s other central banks, there was a sense of fatalism: The economy has suffered a crushing blow. More stimulus — monetary, fiscal, whatever — won’t work. All we can do is sit on our hands and hope for the best.
Further down we read:
Bernanke and the Federal Open Market Committee weighed the arguments of economists supporting “nominal GDP targeting,” but rejected a full-bore push in a direction that seemed to them risky and unworkable. But they took to heart some crucial insights from advocates of that approach, particularly around the importance in a central bank shaping expectations to influence the economy.
NGDPT “risky and “unworkable”? He should talk to Mark Carney who just lay down what, according to some, is a monetary policy strategy blueprint for when he takes over the BoE next June.
On the importance in a central bank shaping expectations…Bernanke has full knowledge. What he´s terribly afraid is of people coming to expect higher inflation. That´s why the inflation threshold is capped at 2.5%!
And at the end:
Bernanke made his career studying the errors of central bankers in the Great Depression and then in 1990s Japan, arguing consistently that more forceful monetary policy would have jolted those economies out of their troubled state. He has acted as if on a mission to avoid becoming one of those central bankers who were, in his view as an academic, culpable for unnecessary misery heaped upon their people.
He studied all right…but didn´t pass the exam!
I´m of the view that he has been pretty blazé about the whole thing, not acting as if on a mission.
And Carney says that guidance-cum-thresholds is the “end of the road”, they “exhaust the guidance options available”. “If yet further stimulus were required the policy framework itself would likely have to be changed”. And that will only happen if someone else replaces Bernanke in 2014.
Historinhas 