Business cycles lengthened greatly during the 20th century, as central banks learned to manage national economies by raising and lowering interest rates.
Sentiment: NEGATIVE
The 'boom-bust' cycle is generated by monetary intervention in the market, specifically bank credit expansion to business.
Stronger productivity growth would tend to raise the average level of interest rates and, therefore, would provide the Federal Reserve with greater scope to ease monetary policy in the event of a recession.
The Fed's ability to raise and lower short-term interest rates is its primary control over the economy.
The Global Financial Crisis and Great Recession posed daunting new challenges for central banks around the world and spurred innovations in the design, implementation, and communication of monetary policy.
Inflation is lower and more stable and the real business cycle fluctuations are more modest.
Interest rates are used to achieve overall economic stability.
After a long period in which the desired direction for inflation was always downward, the industrialized world's central banks must today try to avoid major changes in the inflation rate in either direction.
It would be helpful if someone would lay out exactly the economic mechanism that gets us from yet lower interest rates to actual economic activity.
Efforts to promote financial stability through adjustments in interest rates would increase the volatility of inflation and employment. As a result, I believe a macro-prudential approach to supervision and regulation needs to play the primary role.
We believe that the Federal Reserve has to carry on with a progressive increase in interest rates as a consequence of the American economy.
No opposing quotes found.