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Gross Domestic Product (gdp)
The writer writes this journal in response to Bernanke Ben’s decision not only to defend the central bank but also his policies in the wake of the diminutive economic growth. The journal reviews several aspects related to the slow growth of the Federal Reserve System Fed. The Journal looks into the Ben’s comments on national unemployment; monetary policy; economic models and growth; economic conditions and the Federal Reserve monetary policy. The journal also evaluates his comments on their relationship to the slow growth of the bank.
Numerous issues are affecting the growth rate of Fed. The most profound factor is the monetary policy of the bank about the current economy and current conditions of the United States. The writer indicates that according to the Ben Fed’s choice to incorporate quantitative easing was a useful approach to the financial panic. The process increased the private sector spending in the economy and is returning inflation to target.
Ben’s take application of the monetary policy is that the bank should not prioritize abrupt change. Ben admits the possibility of effects related to quantitative easing; however, incorporation of the monetary policy shows great promise and sooner rather than later the monetary policy will produce results. Quantitative easing has brought about an increase in the asset prices and status of the wealthy. The only aspect that has not yet turned for the better is the working, class. In Ben’s point of view, Fed was exceedingly negative about unemployment in the nation that in turn affected its economic growth forecasts. The decline in the unemployment rate in the country indicates that Fed's efforts to reduce unemployment are paying off. The author rejects Ben’s notion indicating that joblessness has decreased significantly because a lot of people have left the workforce. Additionally the rate of labor participation in the United States has hit its lowest since 1978. The lethargic expansion of the labor force in comparison to the population has reduced the participation rate in the country. Subsequently, the ranks of the unemployed are reducing because of the expansion of the labor; therefore reducing the unemployment. If the labor force participation rate were consistent, the joblessness rate would be higher. To some extent, the patterns in the job market show Ben’s comments are not comprehensive and overly optimistic. Ben uses performance comparisons as an impression management strategy in disclosure of information. According to Ben, a comparison between the United States Europe and Japan reveals that the United States is performing better because it is incorporating quantitative easing. It also shows that Fed’s efforts are fundamental in the reduced unemployment rates in the country.
The writer shows concern that Ben proceeds in an expedient way; attributing positive outcomes to entitlements and adverse outcomes to excuses. According to the writer, Ben and Fed should stop making excuses and take responsibility for the slow growth of Fed. The financial crisis isn't the only reason behind the deplorable performance of Fed. The best strategy to remediating the dismal performance displayed by Fed is by creating an improved data-driven monetary policy. There are numerous approaches to improving the monetary policy that can increase the performance of the nation without lifting the fed-funds rates as stated by Ben.
Bernanke's rebuttal. (2015, May 01). Wall Street Journal.
Sherry Roberts is the author of this paper. A senior editor at Melda Research in cheap reliable essay writing service if you need a similar paper you can place your order for a custom research paper from cheap assignment services.
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