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Ben Bernanke Retrospective

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Now that Ben Bernanke is getting some tentative plaudits for his rate cuts and Bear Stearns bailout, is this different than what was expected? A look back at the time of his nomination:

Marginal Revolution on BB’s academic history from late 2005:

The credit channel for monetary policy; here are the papers, most of all the 1992 piece with Alan Blinder. Bernanke took an old Keynesian idea and gave it empirical rigor. During upturns and downturns, does money or credit play the leading role? Bernanke showed that credit has greater importance. Bernanke’s work in particular helped combat the Litterman and Weiss paper of 1983; L&W had showed that once you put the nominal interest rate in a Vector Autoregression (a relatively atheoretical statistic technique), money didn’t seem to matter. Bernanke rescued the relevance of money but showed it mattered through the associated channel of credit. This work stands among the most important contributions in macroeconomics in the last twenty years. It also suggests that Bernanke, as Fed chair, will look closely at credit indicators. Here is a Bernanke speech on money and the stock market.

Daniel Drezner linked to a number of comments

Brad Delong, note the housing bubble mentions in the comments

Economist’s View has links to most other 2005 reviews

New Economist confirmed the glowing predictions

Bernanke predicts house bubble could cool in Washington Post, but to be fair:

That view mirrors Greenspan’s .He and Bernanke have both said it is unrealistic to expect the Fed to identify a bubble in stock or real estate prices as it is inflating, or to be able to pop it without hurting the economy. Instead, the Fed should stand ready to mop up the economic aftermath of a bubble.

Written by Demosthenes

March 18, 2008 at 6:04 pm

J.P. Morgan keeps cash in his pockets

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Brad DeLong on how to buy a 1.2 billion dollar building for 240 million

Written by Demosthenes

March 17, 2008 at 5:23 pm