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The Fed hopes to stop investment bubbles before they pop. Good luck!
This Link is located in the Public Channel Slate Magazine.
Posted by MyPropsMonkey 184 days ago (feeds.feedburner.com).  Views: 143
Tags: slate  politics
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What should the Federal Reserve do—and what can the Federal Reserve do—about investment bubbles? On Friday, the Wall Street Journal  profiled a group of Princeton economists who have been hired by current Federal Reserve Chairman Ben Bernanke to study the subject. "The Princeton squad argues that the Fed can and should try to restrain bubbles," the Journal wrote, "rather than following former Chairman Alan Greenspan's approach: watchful waiting while prices rise and then cleaning up the mess after a bubble bursts." In a speech on the same topic last Thursday, Federal Reserve Gov. Frederic Mishkin said that while the Fed probably shouldn't be in the asset-bubble-bursting business, it should have mechanisms in place to stop periodic outbursts of investor insanity from infecting the credit system.

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