🕧Free 21st Century Monetary Policy: The Federal Reserve from the Great Inflation to COVID-19 by Ben S. Bernanke (Author)
21st Century Monetary Policy: The Federal Reserve from the Great Inflation to COVID-19 by Ben S. Bernanke (Author)
21st Century Monetary Policy takes readers inside the Federal Reserve, explaining what it does and why. 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. Read more
Ben Bernanke did not disappoint. This is a phenomenal book. It reads mostly like an academic book (which is to be expected in light of Mr. Bernanke's background as a professor), but there are very few people on earth who are more credible and knowledgeable as Mr. Bernanke on matters pertaining to economic history and federal reserve policy. It was enjoyable to read through the past 70 years of U.S. economic / federal reserve history (along with a brief history of the Great Depression). The book refreshes the reader on the causes of the Great Depression, focusing on the gold standard, which the U.S. and other countries subscribed to back then. Although it's well known that the 1920s consisted of a period of new products, technological inventions (most notably the automobile), easy money policies and buying products on credit, speculative investing and investing on margin, what's not as well known is the role the gold standard played in the Great Depression. Because there was not enough gold to satisfy all the fiat currency in circulation, the system failed as soon as panic set in. Further, the federal reserve was limited in its ability to expand the money supply to stimulate the economy since the dollar was pegged to gold. Fast forward to the 1950s and William McChesney Martin enters the scene as the federal reserve chairman, followed by his successor Arthur Burns. This era in federal reserve history was marked by a lack of independence between the fed and white house. President Nixon was concerned about his re-election prospects and pressured Burns to keep monetary policy easy despite risks of inflation. Rather, wage/price controls were put into effect as a matter of political expediency but failed. The Great Inflation period ensued. But Nixon got re-elected. Somehow, President Carter appoints Paul Volcker as fed chairman to succeed Burns, despite Volcker's brutal honesty that he planned to take bold action to contain inflation. Of course, this likely cost Carter re-election but Volcker's actions in tightening monetary policy (causing 2 recessions in the early 1980s) restored price stability. Alan Greenspan succeeded Volcker and ushered in a new era of price stability and prosperity, accomplishing a "soft landing" in 1994 when the fed had to tighten policy, and presiding over two decades of strong economic growth and stock market performance. But perhaps overshadowing two decades of brilliant leadership by Greenspan was his failure in assuming wall street and banks would act responsibly in extending loans, contributing to the subprime mortgage debacle and Great Recession. The author of course replaced Greenspan as federal reserve chairman and navigated the country through the Great Recession, innovating with new monetary tools to stimulate the economy in light of the fact that lowering interest rates alone would be insufficient -- for example, the fed implemented "quantitative easing" -- and began buying billions of dollars of government mortgage bonds and treasury bonds. The author then takes the reader through recent history and explains how current chairman Jerome Powell expanded on Bernanke's playbook to get us through the 2020 covid pandemic. Finally, the author speculates on the future and how monetary policy might need to adapt to succeed at managing the economy and stock market going forward, in light of the new era we ushering in with ever-declining interest rates (which the author posits is due in part to productivity growth, low inflation, and less need for investment over the past 40 years). I was itching to learn about the author's thoughts on the current inflation situation -- but apparently he finished the book in late 2021 and there was a 6 month delay before the book got published. Overall, great read.
Publisher -> W. W. Norton & Company (May 17, 2022) Language -> English Hardcover -> 512 pages ISBN-10 -> 1324020466 ISBN-13 -> 978-1324020462 Item Weight -> 1.87 pounds Dimensions -> 6.5 x 1.6 x 9.6 inches Best Sellers Rank: #1,099 in Books (See Top 100 in Books) #1 in Economic Policy #1 in Banks & Banking (Books) #1 in Money & Monetary Policy (Books)
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