Bernanke AEA Speech Last Hurrah for Central Bankers, Says Summers

The transcript discusses the limitations of monetary policy in addressing recessions, given the current low interest rates. It suggests that fiscal policy, including direct government spending and public investment, should play a larger role. The concept of semi-automatic stabilizers is introduced, advocating for pre-set rules to adjust spending during economic downturns, such as increased state assistance and temporary tax credits.

Why does the speaker believe monetary policy might be ineffective in future recessions?

• Recessions are unlikely to occur again.

• Central banks have unlimited resources.

• Quantitative easing is highly effective.

• Interest rates are already too low.

What does the speaker suggest as a solution to economic downturns?

• Relying solely on monetary policy.

• Direct government spending.

• Increasing interest rates.

• Reducing public investment.

What is the speaker's view on public investment in infrastructure?

• It is already sufficient and well-maintained.

• It is crucial due to current decay.

• It is unnecessary in modern economies.

• It should be entirely privatized.

What is the main focus of the semi-automatic stabilizers discussed by the speaker?

• Relying on Congress for every economic decision.

• Increasing taxes during recessions.

• Implementing rules for automatic spending adjustments.

• Eliminating all forms of government assistance.

Which of the following is NOT mentioned as a potential measure in the semi-automatic stabilizers?

• Assistance for unemployed individuals.

• Permanent tax cuts for all citizens.

• Temporary tax credits for spenders.

• Greater assistance to states.