Posted To: MBS Commentary
Back in the good old days during the infancy of the financial crisis, much was made of Bernanke's study of Japan's massive, long term, secular deflationary cycle. Bernanke figured there were clear lessons to be learned from what, at the time, seemed like mistakes made in Japan. The best way to sum up those 'mistakes' would simply be to say that Japan's monetary policy response to its deflationary problems was "too little, too late," and that it would ideally be coordinated with a fiscal response (where "monetary policy" refers to what the central bank does and where "fiscal policy" refers to what the government does). As you might remember from some of Bernanke's more passionate exchanges with his friends in Congress, The Fed generally felt...(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
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