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At the Federal Reserve Bank of Kansas City’s annual economic symposium, held in Jackson Hole, Wyoming on August 21, 2009, Ben Bernanke expressed satisfaction with the action that his administration undertook to save the financial system. According to Bernanke, History is full of examples in which the policy responses to financial crises have been

  The latest data for lending in the eurozone, the United Kingdom, and the United States display a visible weakening. In the eurozone, the yearly rate of growth of bank lending to the private sector fell to 0.6% this July from 9.3% in July last year. In the United Kingdom, the yearly rate of growth of lending to the private sector fell to 2.2% in

Given the recent, massive increase in commercial banks’ excess reserves, many commentators are of the view that banks will sooner or later start employing these reserves in lending and thus cause an increase in the inflation rate. Even former Federal Reserve Chairman Alan Greenspan is alarmed by the massive pumping by the Fed and other central

Many commentators are of the view that the biggest threat to the economy is deflation rather than inflation, because of the present economic slack. The United States used only 69.6% of its industrial capacity in August, against 77.6% in August last year and the historical average of 81.1% since January 1967. In Q2 this year, the real GDP stood

US credit is undergoing a major contraction. In the week ending October 14, US commercial-bank lending stood at $5,686.8 billion: a fall of 6.6% from the end of January.   Year on year , loans fell by 7% in October after declining by 5.8% in September. On the same basis of comparison, in October last year, loans increased by 6.6%. The growth

There is an increasing concern among some commentators that the current, extremely loose monetary policy of the US central bank could fuel another round of asset-price bubbles. This in turn, it is held, could pose a serious danger to the US economy. Some commentators, such as John Taylor (the inventor of the Taylor rule), are urging the US

Economists are currently divided on the issue of how strong the US economic recovery is going to be. Some are of the view that as a result of the stimulus policies of the Fed and the Federal government, the recovery is going to be quite strong. Some others are more pessimistic given still-rising unemployment, which they believe will keep consumer

In his speech at the Economic Club in Washington, DC on December 7, the Fed chairman, Ben Bernanke, detailed his expectations of the future course of the US economy. Below, I comment on the various parts of Bernanke’s speech. A year ago, our economy — indeed, all of the world’s major economies — were reeling from the effects of a devastating

Real GDP increased at an annual rate of 5.7% in Q4 after rising by 2.2% in Q3 — the quickest pace in more than six years. This was above Wall Street economists’ forecast for a 4.6% increase in Q4 . The yearly rate of growth of real GDP climbed to 0.1% in Q4 from −2.6% in Q3 . The yearly rate of growth of GDP at current prices, i.e., nominal GDP

June 16, 1933. President Roosevelt signs Banking Act of 1933. To FDR’s immediate right and left are Sen. Carter Glass of Virginia and Rep. Henry Steagall of Alabama. At the end of January, President Barack Obama announced that he is planning to introduce new regulations for the banking industry, to prevent excessive speculation. According to the