Thursday, December 4, 2008

Governor Bernanke on deflation (os)

While everybody is talking about whether we are facing a inflationary or deflationary future, here you find a speech of (at this time (2002)) governor B. Bernanke on the risks, causes and cure of a deflationary process. He brings up issues such as debt deflation, cause of deflation, zero bound etc. Concluding with the words that give hope to everyone of us:
I hope to have persuaded you that the Federal Reserve and other economic policymakers would be far from helpless in the face of deflation, even should the federal funds rate hit its zero bound