Skip to comments.A slow recovey and the Fed's response
Posted on 02/12/2013 10:58:09 AM PST by ExxonPatrolUs
Thank you for the opportunity to speak to you today about the Federal Reserves efforts to strengthen the recovery and pursue a goal that it shares with the labor movement: maximum employment.
As an objective of public policy, maximum employment doesnt appear in the U.S. Constitution, in any presidential decree, or even in the mission statement of the Labor Department. A law passed in 1946 made it a general goal for the U.S. government, but so far the Federal Reserve is the only agency assigned the job of pursuing maximum employment. The 1977 law spelling out that responsibility also assigned the goal of stable prices, and we call this combination of objectives the Federal Reserves dual mandate.
With so many people today unable to find work, it might seem odd to highlight such an ambitious and distant goal for employment. I do so because the gulf between maximum employment and the very difficult conditions workers face today helps explain the urgency behind the Federal Reserves ongoing efforts to strengthen the recovery. My colleagues and I are acutely aware of how much workers have lost in the past five years. In response, we have taken, and are continuing to take, forceful action to increase the pace of economic growth and job creation.
In the three years after the Great Recession ended, growth in real gross domestic product (GDP) averaged only 2.2 percent per year. In the same span of time following
1 The views expressed here are my own and not necessarily those of my colleagues in the Federal Reserve System. I am indebted to members of the Board staff--John Maggs, Karen Pence,
(Excerpt) Read more at federalreserve.gov ...
Time to Throw the Phillips Curve
October 20, 2006 9:12 A.M.
Last week the Nobel committee announced that this years prize in economics would be going to Dr. Edmund Phelps of Columbia. This is good news indeed for advocates of supply-side economics. Phelps principal academic achievement is his successful rebuttal of one of the central tenets of modern Keynesianism: the Phillips curve.
For decades policy makers hewed to the premise that the Phillips curve demonstrates inherent long-term trade-offs between growth and stable prices. This led an entire generation of planners to believe that if the economy is flagging, you should print more money; that if the economy is growing too fast, stop the presses, slow things down, and throw millions of people out of work.
Some really great charts there to show how weak this recovery is compared to other recoveries. BTW, Yellen will likely replace Bernanke when he steps down.
Ping. Little more background, re. Vice Chairperson, Janet L. Yellen.
Ping. Interesting info on Vice Chairman Janet L. Yellen.
And more behind this other link.
Yellen: Fed To Keep Treasury and Mortgage Rates Low Even AFTER Targets Met