Abstract
The fall in global nominal GDP growth from the precrisis period to the post-crisis period is alarming. Economic policymakers, including central bankers, failed to deliver the economic outcomes that they promised. Monetary policy, in particular, is not readily reducible to a set of immutable truths. Too many in the professoriate rely to our detriment on the outputs of their preferred models. I am troubled by Fed fine-tuning of policy and overpromising of benefits. Measurement challenges are growing faster than our understanding of inflation dynamics. The Fed is preoccupied with its vaunted forecasts. Instead, it should focus its considerable energies on more troubling contemporaneous developments in the real economy.
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Prepared from a speech given at the NABE Economic Policy Conference on March 8, 2016.
*Kevin Warsh is the Shepard Family Distinguished Visiting Fellow in Economics at Stanford University’s Hoover Institution and lecturer at Stanford’s Graduate School of Business. He advises private and public companies, including serving on the board of directors of UPS. He is a member of the Group of Thirty. He served as a member of the Board of Governors of the Federal Reserve System from 2006 until 2011. He also served as the Federal Reserve’s representative to the Group of Twenty (G-20) and as the board’s emissary to the emerging and advanced economies in Asia. In addition, he was administrative governor, managing and overseeing the board’s operations, personnel, and financial performance. Before his appointment to the board, from 2002 until 2006, he served as special assistant for economic policy to the president and as executive secretary of the White House National Economic Council. Previously, he had been a member of the Mergers & Acquisitions Department at Morgan Stanley & Co. in New York, serving as vice president and executive director. He received his AB from Stanford University and his JD from Harvard Law School.
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Warsh, K. Challenging the Groupthink of the Guild. Bus Econ 51, 142–146 (2016). https://doi.org/10.1057/s11369-016-0002-4
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DOI: https://doi.org/10.1057/s11369-016-0002-4