Book Review: 21st Century Monetary Policy: The Federal Reserve from the Great Inflation to COVID-19

Abstract

Ben Bernanke's new book, _21st Century Monetary Policy: The Federal Reserve from the Great Inflation to COVID-19_ reflects his confidence in the Fed as a living institution. There is no late professional life confession pointing to a better way forward. The author gives a blow-by-blow account of his actions as top monetary bureaucrat and the justifications. But he gives no ground in his refusal to recognize the malaise of monetary inflation, or how in time it produces the symptoms of goods inflation and asset inflation. Bernanke does not pass harsh criticism on any past chair of the Fed, and one senses that the author as historian is straining to sustain the reputation of the Fed rather than to discover what actually happened.

The Narrow Channel of Quantitative Easing: Evidence from YCC Down Under

“…We estimate the yield response of AGB yields to actual YCC purchase operations and find that the “flow effects” of YCC were narrow, with a sizeable effect on the specific CUSIP but little spillover on other AGBs, OIS expectations, or term premia. These findings together suggest that QE policies ease financial conditions but with an effect that is more limited to the specific assets being purchased than might previously have been hoped (see, e.g., Bernanke (2012, 2022)).…”

Global stagflation shocks and the revision of monetary policy: lessons from the crises of the 1970s and 2020s

“…Причина, объясняет Б. Бернанке, заключалась в том, что в долгосрочной перспективе монетарная политика (вместе с фискальной) является основным фактором, определяющим уровень инфляции, а инфляция не имеет природного уровня, к которому она стремится. На безработицу же монетарная политика способна влиять в краткосрочной перспективе, но в долгосрочном периоде она определяется факторами, неподконтрольными центральному банку: эффективностью рынка труда, стратегиями бизнеса, демографическими тенденциями, квалификацией рабочей силы и т. д. В документе говорилось, что ФРС будет применять "сбалансированный подход", предусматривающий одинаковую важность частей мандата, но предпочтение отдаётся цели, более удалённой от желаемого уровня (Bernanke, 2022).…”

“…Поэтому, согласно новой стратегии, монетарная политика должна направляться на снижение безработицы, пока не проявятся признаки перегрева экономики. Личные прогнозы членов ФКВР относительно ставки по федеральным фондам, опубликованные в сентябре 2020 г. в Своде экономических прогнозов, свидетельствовали, что они не ожидали её повышения в ближайшие три года (Bernanke, 2022).…”

On subjective well‐being and excess strategy to cope with financial‐scarcity problem

“…Indeed, recent data show a dramatic change in the labor supply. Workers quit their jobs (Bernanke, 2022), a phenomenon coined as the Great Resignation (Sull et al, 2022), many of them choosing to be gig workers and practice a hybrid work model (Microsoft Corporation, 2021). 1 A plausible explanation may be the understanding of individuals that their happiness is positively correlated with a prudent management of excessive material desires.…”

“…1 1 Between April and September 2021, an all‐times record of more than 24 million American employees left their jobs (Sull et al, 2022). By the end of 2021, total employment in the United States remained 3.6 million below its pre‐pandemic peak (Bernanke, 2022). In 2017, 34% of the workforce (about 55 million people) in the United States were gig workers, and the number was predicted to be 43% in 2020 (Cao et al, 2020).…”