Jon Hilsenrath at the WSJ has a preview: Fed Chief Gets Set to Apply Lessons of Japan's History
Mr. Bernanke is preparing for a potentially important policy speech Friday, when he could detail his thinking on the Fed's next steps ... The conference is a reprise of a 1999 conference at which Mr. Bernanke and other academics took Japanese officials to task for failing to get their economy moving.
Here is the 1999 paper that Hilsenrath mentions: From Ben Bernanke (1999): Japanese Monetary Policy: A Case of Self-Induced Paralysis?
There is quite a bit about deflation and monetary policy in his 1999 paper, including arguing for a higher inflation target of 3% to 4%. Bernanke even made some "helicopter drop" comments before his well known speech in 2002: Deflation: Making Sure "It" Doesn't Happen Here
Some great questions to answer in the future are:
Are we avoiding inflation expectations today because we are backwards looking at 20 years of little to no inflation?
Can we handle the medicine it will take to get rid of inflation?
the argument gets skewed when you consider two things:
ReplyDelete1) "real' inflation has been bastardized since the things we buy that matter to most people are not counted in the inflation figure (gas, food and other stuff) Real inflation is much higher...
2) Since when does 'stimulus' (like gov't involement trump private enterprise? You would have to accept the premise that 'some kind of stimulus' of gov't spending 'could work' - while true free-market Austrian entreprenuers know that if gov't totally stayed out (or got further out by reducing taxes and spending) then our economy would come roaring back...
the problem is the looters in DC will never take responsibility and choose good stewardship over spending, spending, spending...
Even if we could get a cap gains reduction, eliminate dividend & corp tax and reduce income tax... the economy would skyrocket as multi-national and US co's would flock back to the greatest nation on earth along with tons of other foreign companies who would find the business environment inviting... but still, I fear, the damn looters of DC would manage to spend all the EXTRA revenue (as predicted by the Laffer Curve and increase velocity of money) and then some keeping our country on the collision course with insolvency...