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10 Questions for Janet Yellen

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November 13, 2013 – Comments (1)

The heir-apparent to Helicopter Ben

 

Question #1

Do you know how much the Fed's balance sheet has increased as a result of QE?

 

Question #2

Regarding the answer to the previous question, what % of GDP growth over the years can be directly traced to this amount?

 

Question #3

The Federal Reserve currently has a “dual” mandate: a stable currency and economic growth. Is the latter a proper task of monetary policy?

 

Question #4

In the aftermath of the near collapse of the banking system 4 years ago, the Federal Reserve lent reserves to many banks but refused to disclose who and how much or even which country. In your opinion, did this decision damage public support for the FR?

 

Question #5

Over the years, the retired Chairman Alan Greenspan has admitted that he missed the property “bubble”, and that he was at least partly responsible for the subsequent collapse of the banking sector. Do you agree?

 

Question #6

The current Chairman has previously stated that 6.5% unemployment would signal the end of QE. Do you agree, or do you think that this standard should be explicitly discarded?

 

Question #7

Some have stated that QE has eased the need for serious fiscal reform. Do you agree?

 

Question #8

Some members of the Senate have stated the need to audit the FR. The current chairman has stated that such audits already take place. What types of additional audits would you be willing to support, and should they be publicly reported?

 

Question #9

Do you believe that QE is consistent with the stated goal of a strong dollar?

 

Question #10

President Nixon closed the gold window in 1971. Under what conditions do you think it should be reopened?

 

Question #11

In the opinion of Alan Blinder, past member of the Council of Economic Advisors and ex-vice-chair of the FR, several US banks are “too big to fail”. Do you agree, and what, if anything, should the FR do about it?

 

Question #12

Yes, I am capable of counting to “10”.

1 Comments – Post Your Own

#1) On November 13, 2013 at 4:01 PM, Mega (99.96) wrote:

I think her responses might be something like this. All of these responses are extremely mainstream, not particular to her. 

1. Yes
2. Unclear, possible to make a very rough estimate but not possible to measure. Employment and GDP would be much worse if not for QE. We could be experiencing deflation and recession, more similar to Europe over the past few years.
3. Yes. And the dual mandate is law, not just regulation/policy.
4. They did disclose this information after a delay and legal wrangling. http://online.wsj.com/news/articles/SB10001424052748703806304576234581945885172 No, this decision did not materially affect their credibility. The Federal Reserve is a bureaucratic institution not a political institution, so credibility with the market is more important on a day to day basis than popularity with the public.
5. The scale of the bubble was enormous. It is not reasonable to expect the Federal Reserve to prevent bubbles from occuring.
6. That level of unemployment would most likely allow us to reduce or end the QE program. We will continue to evaluate the scale of the QE program using multiple metrics - a single metric is not the appropriate tool.
7. No.
8. The Fed is already publicly audited. http://www.federalreserve.gov/faqs/about_12784.htm They will comply with whatever additional regulations Congress imposes.
9. Mainly yes. "Strong dollar" is a political description of one half of the dual mandate. Putting additional emphasis on price stability would come at the expense of the other half of the mandate.
10. No conditions. A fixed exchange rate to gold has proven unhelpful in addressing the Fed's goals.
11. This is primarily the scope of Treasury, not the Federal Reserve. Dodd-Frank established the Financial Stability Oversight Council which regulates the systemically important financial instutitions. http://www.treasury.gov/initiatives/fsoc/Pages/home.aspx

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