Expansionary Policy Quotes

Even if the government spends itself into bankruptcy and the economy still does not recover, Keynesians can always say that it would have worked if only the government had spent more.

We simply can't spend our way out of a recession.

We are all Keynesians now.

Importantly, in the 1930s, in the Great Depression, the Federal Reserve, despite its mandate, was quite passive and, as a result, financial crisis became very severe, lasted essentially from 1929 to 1933.

If Australia finds it has a strong Australian dollar, and it has higher unemployment, then it would have to respond, and that would either be by increasing domestic demand or by weakening its own currency.

By putting downward pressure on interest rates, the Fed is trying to make financial conditions more accommodative - supporting asset values and lower borrowing costs for households and businesses and thus encouraging the spending that spurs job creation and a stronger recovery.

When the economy shows signs of faltering, prompt countermoves are required. Even mild measures on the part of government can be effective in the early stages of an economic decline. ... If action is withheld until a recession has gained momentum, strong and costly measures may prove insufficient.

Monetary policy is not a panacea.

At least since 1947, the historical record seems to support a simple conclusion: If you want the American economy to grow, you ought to put a Democrat in the Oval Office.

It's become glib political conventional wisdom in Washington that a massive spending plan will provide a parachute rescue for a cliff-diving economy - landing it safely and with strong enough legs to move toward a healthy future.

In effect, there has been a significant shortfall in the overall amount of monetary policy stimulus since early 2009.

Whatever the economy needs to maintain itself, the government will do it.

I don't know of any President, now or in the past, who does not favor lower interest rates. That's the American way.

In the '30s, the Keynesian stuff worked at least in the sense that you could print money without inflation because there was all this productivity growth happening. That's not going to work today.

After the 1929 crash, the Federal Reserve mistakenly focused its policies on preserving the gold value of the dollar rather than on stabilizing the domestic economy.

Monetary policy will, as always, respond to the economy's twists and turns so as to promote, as best as we can in an uncertain economic environment, the employment and inflation goals.

In 2006, the Congress had approved plans to allow the Fed, beginning in 2011, to pay interest on banks' reserve balances. In the fall of 2008, the Congress moved up the effective date of this authority to October 2008.

The Federal Reserve has an official commitment to two different policies. One is to prevent inflation from getting too high. The second is to maintain high employment... the European Central Bank has only the first. It has no commitment to keep employment up.

The observation that money changes induce output changes in the same direction receives confirmation in some data sets but is hard to see in others. Large-scale reductions in money growth can be associated with large-scale depressions or, if carried out in the form of a credible reform, with no depression at all.

The Fed contributed to the financial crisis, keeping interest rates too low for too long. I give them credit for responding and stabilizing the economy and the financial sector during the crisis. But then they tried to do too much with quantitative easing that went on forever, just dramatically exploding their balance sheets.

There is a broad consensus, not only in the United States but in most of the world, that if you are in an economic downturn, you need to stimulate. Germany seems to be an exception.

Monetary policy cannot do much about long-run growth, all we can try to do is to try to smooth out periods where the economy is depressed because of lack of demand.

It's pointless to talk to Fed members about economics because they are academics who believe in money-printing. Some of them believe they didn't print enough, and so with these kinds of people, it is like running to the pope. What do you want to tell them?

Until the Fed dumps inflation targeting and the U.S. abandons its weak-dollar policy, inflation will rule the day.

The truth of the matter of is that stimulus money not only doesn't stimulate; it actually reduces output.