Greenspan – hero or zero?

8 Nov
alan-greenspan

Mallaby on Greenspan

Good session last night at the LSE with Sebastian Mallaby talking about his book on Greenspan. You can see some pics on Twitter via #LSEGreenspan.

The discussion on whether interest rates/monetary policy should be used to deal with asset bubbles was interesting. Mallaby’s view was that the Fed could at least set interest rates, whereas trying to use regulation to deal with asset bubbles (and financial irregularities in general) was much more difficult – attempts to do so were bound to be mired in Washington politics and/or the ‘balkanisation’ of US regulation.

The position has echoes of Keynes ‘monetary policy a l’outrance’ – taking bold an decisive action to deal with a slump or boom. But Greenspan – ‘the man who knew’, as Mallaby explained, was not a man willing to act or confront. Knowing is only half, perhaps less than half, of what a central banker needs to succeed.

 

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: