Reducing Budget Deficits (Remarks by Federal Reserve Board Governor Edward M. Gramlich)

Fed Governor Gramlich just gave an interesting and informative speech on the Federal Budget Deficit. He points out the difficulty in forecasting it, the fact that it is based on cash basis accounting which brings its own problems (example future social security problems!), and even suggests ways to improve the budgeting process. My take is that budget deficits are not in and of themselves bad, … [ Read more ]

Conducting Monetary Policy – Remarks by Governor Edward M. Gramlich

What is the goal of Moentary policy? It should be price stability according to Fed Governor Edward Gramlich who made his views known in a recent speech at the ASSA conference (AKA the AFAs) in Washington DC. “The long-run anchor is clearly price stability. Following Milton Friedman, inflation in the long run is a monetary phenomenon, as is deflation. Hence, the long-term goal … [ Read more ]