Economics

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

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

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  • Type：Epub+TxT+PDF+Mobi
  • Create Date：2022-06-25 06:52:45
  • Update Date：2025-09-06
  • Status：finish
  • Author：Ben S. Bernanke
  • ISBN：1324020466
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Summary

In response to the COVID-19 pandemic， the Federal Reserve deployed an extraordinary range of policy tools that helped prevent the collapse of the financial system and the U。S。 economy。 Chair Jerome Powell and his colleagues lent directly to U。S。 businesses， purchased trillions of dollars of government securities， pumped dollars into the international financial system， and crafted a new framework for monetary policy that emphasized job creation。


These strategies would have astonished Powell’s late-20th-century predecessors， from William McChesney Martin to Alan Greenspan， and the advent of these tools raises new questions about the future landscape of economic policy。


In 21st Century Monetary Policy， Ben S。 Bernanke—former chair of the Federal Reserve and one of the world’s leading economists—explains the Fed’s evolution and speculates on its future。 Taking a fresh look at the bank’s policymaking over the past seventy years， including his own time as chair， Bernanke shows how changes in the economy have driven the Fed’s innovations。 He also lays out new challenges confronting the Fed， including the return of inflation， cryptocurrencies， increased risks of financial instability， and threats to its independence。


Beyond explaining the central bank’s new policymaking tools， Bernanke also captures the drama of moments when so much hung on the Fed’s decisions， as well as the personalities and philosophies of those who led the institution。

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Reviews

Stephen Campbell ，

This is not a light reading book。 It is a serious book written by a former head of the Federal Reserve。 The only complaint I have about the book is that it gives the impression that the Federal Reserve has had various crisis under control even if they were a caught a little off guard。 If you have read either or both， Too Big to Fail or The Big Short about the 2008 crisis and add this book you probably get a more balanced view of how close the US has come to financial failure。 The book is worth g This is not a light reading book。 It is a serious book written by a former head of the Federal Reserve。 The only complaint I have about the book is that it gives the impression that the Federal Reserve has had various crisis under control even if they were a caught a little off guard。 If you have read either or both， Too Big to Fail or The Big Short about the 2008 crisis and add this book you probably get a more balanced view of how close the US has come to financial failure。 The book is worth getting a view of what happens behind the curtain。 。。。more

Ian Karundeng ，

A good insight into the highly misunderstood entity that is the federal reserve。 Ben gives the history， policies， intentions， and future outlook on the fed’s tools for governing the US monetary system。

Matthew Barmack ，

For me， a Ph。D。 economist who hasn't thought about macro in a long time， this was a surprisingly readable account of the shifts in Fed policy over the last fifty years。 （Might be a bit dry and technical for someone with no prior knowledge of/interest in macro。） The author has a remarkable gift for summarizing complicated policy decisions and some of the academic research supporting and validating them in plain English。 （Although I still don't really understand how/why QE works。 As the author not For me， a Ph。D。 economist who hasn't thought about macro in a long time， this was a surprisingly readable account of the shifts in Fed policy over the last fifty years。 （Might be a bit dry and technical for someone with no prior knowledge of/interest in macro。） The author has a remarkable gift for summarizing complicated policy decisions and some of the academic research supporting and validating them in plain English。 （Although I still don't really understand how/why QE works。 As the author notes， it works in practice but not in theory。） The book underscores just how much Fed policy has changed， especially post Financial Crisis。 It also reminded me both why I liked macro and ultimately abandoned it--it involves the application of sometimes elegant abstractions to problems that are not that well-defined and underlying phenomena that frequently are not stable， i。e。， for better or worse， this book definitely illustrates that macro is not one of the more scientific parts of economics。 Consequently， especially as applied to policy， it requires careful judgement， e。g。， the judgement to realize that a model might be wrong。 Thankfully， we have had Fed leaders with the judgement to make many of the right pivots （and explain them to us afterwards）。 。。。more

Ietrio ，

In short: the same old， with some labels changed。 Expect the same crisis as before， only much much powerful。It's funny the nerve this bureaucrats have: this is 19th century thought， relabeled as 20th century practice， relabeled as 21th century。 Thinking is already an effort to big。Now the text: from a man educated on how to generate the 1930s crisis， here is the solution: print more money。 And the joke is on the people who are trying to justify that。 After all， the Covid stimulus came up right a In short: the same old， with some labels changed。 Expect the same crisis as before， only much much powerful。It's funny the nerve this bureaucrats have: this is 19th century thought， relabeled as 20th century practice， relabeled as 21th century。 Thinking is already an effort to big。Now the text: from a man educated on how to generate the 1930s crisis， here is the solution: print more money。 And the joke is on the people who are trying to justify that。 After all， the Covid stimulus came up right after the same financial mobsters announced they are going to reduce the quantity of printed money。 。。。more

Ray Anthony Charles ，

Masterpiece Loved this book by Bernanke giving a historical review of all fed chairs and the challenges faced by each during their tenure。 Critical of his time at the fed with various innovative actions to aid the economy at that critical time。 Raised some important questions about gaps in policy， bureaucratic challenges with congress， the importance for fed independence and better regulation。 Finally how the fed will need to adapt to future challenges analogous to their adaptation to new econom Masterpiece Loved this book by Bernanke giving a historical review of all fed chairs and the challenges faced by each during their tenure。 Critical of his time at the fed with various innovative actions to aid the economy at that critical time。 Raised some important questions about gaps in policy， bureaucratic challenges with congress， the importance for fed independence and better regulation。 Finally how the fed will need to adapt to future challenges analogous to their adaptation to new economic developments and challenges before。As a banker this was very insightful and I learned a lot。 。。。more

Isabelle LaBianco ，

The book is as media trained as bernanke himself

Steven ，

This book is an excellent tool for understanding the Federal Reserve and monetary policy。 It can easily be understood by anyone。 One may not agree with Professor Bernanke， but it is important to understand his views to better understand the Fed's response to recent crises。 This book is an excellent tool for understanding the Federal Reserve and monetary policy。 It can easily be understood by anyone。 One may not agree with Professor Bernanke， but it is important to understand his views to better understand the Fed's response to recent crises。 。。。more

Henk ，

A fascinating peek behind the curtains of one of the most influential institutions in recent modern history。 I enjoyed the insights in policy， and the many considerations this involves。 But definitely not a book for anyone with a firm interest in economicsGood communication makes for effective policymakingDefinitely a good appetiser for any macro economic courses I'll follow later in the next two years。Ben S。 Bernanke describes the history of the Federal Reserve and the extraordinary measures ta A fascinating peek behind the curtains of one of the most influential institutions in recent modern history。 I enjoyed the insights in policy， and the many considerations this involves。 But definitely not a book for anyone with a firm interest in economicsGood communication makes for effective policymakingDefinitely a good appetiser for any macro economic courses I'll follow later in the next two years。Ben S。 Bernanke describes the history of the Federal Reserve and the extraordinary measures taken in response to the financial crisis of 2008 and the COVID-19 pandemic of 2021。 This also sheds a light on how central banks can use policy in the future to address challenges。Goal independence versus policy independence is a first topic touched upon in 21st Century Monetary Policy: The Federal Reserve from the Great Inflation to COVID-19， on how politicians can use the independence of the central bank as a mechanic to take unpopular decisions。Political appointees dominate， but these can’t be sacked for policy disagreements by the government。Great inflationThe historic perspective starts post WWII， with 1952 till 1965 having an inflation which only averaged 1。3%。 Between 1979-1980 inflation was at 13%。 In our current times this is definitely interesting， and Bernanke describes the forces that contributed to this inflation。1960’s Vietnam war spending and the introduction of Medicaid and Medicare increased government spending and demand。 In 1972 the government initiated price freezes， which for two year were successful in reducing inflation， but which also dulled the market response to high pricesThe difference， as also explained in this book， between supply and demand shocks seems hardly that defendable as we now see a price/wage spiral starting， based on supply shocks。 Still it is interesting that the Philips curve of demand and prices interacting， leading to dual mandate of maximum employment （around 3%-4% unemployment being accepted and seen as “normal”） and stable prices， only emerged in the 1970's。Also interesting is how fiscal and monetary policy being used in election years， and inflation being influenced by expectations of inflation。 Politics hence influences monetary policies。The dual mandate also introduces a battle between full employment and taming inflation， or between hawks and doves。 Central bank president Volcker trying to control money supply instead of just using interest rates to enforce policies and control inflation。Forward guidance and greater transparency （Good communication makes for effective policymaking） about expected interest rate developments and the view of the economy and risks being instrumental to get the market to respond to the desired goals of the central bank。 Also a concept of probabilistic forecasting and easing more than the average scenario would require as an insurance against tail negative risks is interesting。2008 financial crisis and beyond50% of subprime loans being originated by companies under oversight of state regulator instead of the Fed。How is the risk of central banks buying government bonds as government financing not mentioned？Independence of central banks as a method to take political unpopular measures good for the long term economy is something Bernanke mentions。Trade war of Trump costing $50billion in subsidies and being passed on to US consumers Trump trying to tweet policies of the FedUSD 2。4trillion asset purchases to prop up the American economy during COVID-19。The Fed owning 37% of treasuries at the high mark of QE。0。63% impact on interest rates of EU countries from QE by ECB。Long term rate cuts being much more effective as a stimulant than short term rate adjustments since this targets mortgage and durable goods investments， which underpin the general economy and consumer confidence。Estimated 1。25% lower unemployment and 0。6% higher inflation in 2015 due to QENeutral estimated interest rate 2。5% before inflation and QE， with an approximately 3。0% additional stimulus margin being available through extraordinary measures。Overal an interesting， if technical book on how central banks work and impact the financial markets。 The general goals are good， and the policies seem well thought out， but the amounts involved are staggering so no wonder many feel that the new directions central banks have moved into are uncomfortable。 Bernanke tries to explain the rationale of measures and reflections on the efficacy of policies， which is commendable。 。。。more

Reference

google book https://www.google.com/search?tbm=bks&q=21st Century Monetary Policy: The Federal Reserve from the Great Inflation to COVID-19

hathitrust digital library https://babel.hathitrust.org/cgi/ls?q1=21st Century Monetary Policy: The Federal Reserve from the Great Inflation to COVID-19&field1=ocr&a=srchls&ft=ft&lmt=ft

The British Library https://bll01.primo.exlibrisgroup.com/discovery/search?query=any,contains,21st Century Monetary Policy: The Federal Reserve from the Great Inflation to COVID-19&tab=LibraryCatalog&search_scope=Not_BL_Suppress&vid=44BL_INST:BLL01&lang=en&offset=0