问题中央银行家观点答案讲座课sentby.pdfVIP

Question1:TheCentralBankersViews

1.1:OutlineAlanGreenspansanalyticalpositionon:

•thenaturalworkingoffinancialmarkets;and

•thecross-borderflowofcapital

beforetheUSfinancialmarketsimplodedin2008?

1.2:PleasediscusswhatarethecorrectassessmentsofGreenspanand,and

whatarethewrong

ones.

1.3:OutlineandcritiqueBernankeandGertlersanalysisonhowmonetary

shouldbeconductedwhenthereisanassetbubbleinprogress;

•Greenspan’sposition

→naturalworkingoffinancialmarkets

Greenspanbelievedinefficientmarket.Hesupportedthatprices

showedallinformationinfinancialmarketsandarguedthatthere

wasnoneedoffinancialregulationandapprovalproceduresfornew

financialproducts.Allthesecontributedtofinancialderegulation.

HebelievedthatUSfinancialmarketswerecompetitive,innovative,

andresilient.Technologicaladvanceshadincreasedtheirefficiency

andscale.Innovationandderegulationhaveexpandedfinancial

marketsandincreasedcreditavailabilitytovariousincomeclasses

whichimprovedpeopleʼswelfare.

Inaword,financialmarketsfunctionedverywellthemselves,sothey

didnotneedintervention.Asaresult,theroleofcentralbankswas

tokeeppricesstabilityinordertogetumsustainablegrowth.

Heconductedmonetaryundertheprincipleofinflation-

targeting.Iftherewasnoinflationpressurebutmoredemandfor

money,thecentralbankcouldincreaseM0toensureeconomic

ˆˆˆˆ

growth.Basedontheequation:P=M+V−Y(^--rateofchange),he

explainedwhytheFedsincreasedM0,anddidnotcauseinflation.

TheincreaseofM0wasoffsetbytheincreaseofY(productivity).

FacedwithsomeoppositionthatstatisticallyYdidnotg