Quotes & Sayings About Monetary Policy

It's important to have the right monetary policy. It's important for, to have the right fiscal policy. But it's nowhere near as important as just the normal regenerative capacity of American capitalism. — Warren Buffett

A third group of inflationists do not deny that inflation involves serious disadvantages. Nevertheless, they think that there are higher and more important aims of economic policy than a sound monetary system. They hold that although inflation may be a great evil, yet it is not the greatest evil, and that the State might under certain circumstances find itself in a position where it would do well to oppose greater evils with the lesser evil of inflation. — Ludwig Von Mises

Any debate among politicians about monetary policy is counterproductive. — Gerhard Schroder

I've always believed in expansionary monetary policy and if necessary fiscal policy when the economy is depressed. — Paul Krugman

The risk exists that, with aggregate demand exhibiting considerable momentum, output could overshoot its sustainable path, leading ultimately in the absence of countervailing monetary policy action to further upward pressure on inflation. — Ben Bernanke

It's true that monetary policy was too lax for too long, and the government encouraged lending to people who were unlikely to repay their loans. — Paul Singer

THE economic consequences of fluctuations in the objective exchange-value of money have such important bearings on the life of the community and of the individual that as soon as the State had abandoned the attempt to exploit for fiscal ends its authority in monetary matters, and as soon as the large-scale development of the modern economic community had enabled the State to exert a decisive influence on the kind of money chosen by the market, it was an obvious step to think of attaining certain socio-political aims by influencing these consequences in a systematic manner. Modern currency policy is something essentially new; it differs fundamentally from earlier State activity in the monetary sphere. — Ludwig Von Mises

I believe, unlike people that are totally free-market, laissez-faire fundamentalists, that there is an important role that the government can play - one, in providing public goods, whether it's education, health care, or other things, and two, supervising countercyclical policy - stimulus, whether it's monetary, fiscal, or otherwise. — Nouriel Roubini

The collapse of an inflation policy carried to its extreme
as in the United States in 1781 and in France in 1796
does not destroy the monetary system, but only the credit money or fiat money of the State that has overestimated the effectiveness of its own policy. The collapse emancipates commerce from etatism and establishes metallic money again. — Ludwig Von Mises

Investors tended to infer future changes in fiscal and monetary policy from political events, which were regularly reported in private correspondence, in newspapers and by telegraph agencies. Among the most influential bases for their inferences were three assumptions: that any war would disrupt trade and hence lower tax revenues for all governments; that direct involvement in war would increase a state's expenditure as well as reducing its tax revenues, leading to substantial new borrowings; and that the impact of war on the private sector would make it hard for monetary authorities in combatant countries to maintain the convertibility of paper banknotes into gold, thereby increasing the risk of inflation. — Niall Ferguson

Monetary policy is not a panacea. — Ben Bernanke

There is always the potential for a central bank to engage in discretionary monetary policy and to break the one-to-one link between changes in foreign reserves and changes in the money supply. — Steve Hanke

Low interest rates are usually attributed to low inflation, weak economic growth and super easy monetary policy. But there's another deep-seated factor that doesn't get much attention: demographics. — Greg Ip

Restrictionistic ideas have never met with any measure of popular sympathy except after a time of monetary depreciation when it has been necessary to decide what should take the place of the abandoned inflationary policy. — Ludwig Von Mises

We must not forget that ... monetary policy all over the world has followed the advice of the stabilizers. It is high time that their influence, which has already done harm enough, should be overthrown. — Friedrich August Von Hayek

Monetary policy has less room to maneuver when interest rates are close to zero, while expansionary fiscal policy is likely both more effective and less costly in terms of increased debt burden when interest rates are pinned at low levels. — Ben Bernanke

Monetary policy cannot do much about long-run growth, all we can try to do is to try to smooth out periods where the economy is depressed because of lack of demand. — Ben Bernanke

So just as I want pilots on the planes that I fly, when it comes to monetary policy, I want to think that there is someone with sound judgement at the controls. — Martin Feldstein

At best, in such depression times, monetary policy is a feeble reed on which to lean. — John Kenneth Galbraith

In 1977, when I started my first job at the Federal Reserve Board as a staff economist in the Division of International Finance, it was an article of faith in central banking that secrecy about monetary policy decisions was the best policy: Central banks, as a rule, did not discuss these decisions, let alone their future policy intentions. — Janet Yellen

This book (Jarod Kintz's book) is trash. I mean, I assume it is, because that's where I found it while scrounging for lunch. However, I must admit that I haven't read it. I would have, but I am homeless, mainly due to my illiteracy (though Big Government, Keynesian monetary policy, and my struggle with alcoholism certainly played a large role). — Dora J. Arod

Transparency concerning the Federal Reserve's conduct of monetary policy is desirable because better public understanding enhances the effectiveness of policy. More important, however, is that transparent communications reflect the Federal Reserve's commitment to accountability within our democratic system of government. — Janet Yellen

Inflation is always and everywhere a monetary phenomenon. — Milton Friedman

Library of the Works of Ludwig von Mises". Here is an article he wrote in 1951, some two years after his magnum opus Human Action appeared, where is lays out his case in a more popular form. The money sentences are "Economic theory has demonstrated in an irrefutable way that a prosperity created by an expansionist monetary and credit policy is illusory and must end in a slump, an economic crisis. It has happened again and again in the past, and it will happen in the future, too. — Ludwig Von Mises

Fiscal policy, monetary policy, they need to work together to try and raise the level of growth. — Joe Hockey

He who cares to go to the trouble of demonstrating the uselessness of index numbers for monetary theory and the concrete tasks of monetary policy will be able to select a good proportion of his weapons from the writings of the very men who invented them. — Ludwig Von Mises

The fallacy of monetary policy in the U.S. is to believe this money will go to the man on the street. It won't. It goes to the Mayfair economy of the well-to-do people and boosts asset prices of Warhols ... Very happy. Very good for the Fed. Congratulations, Mr. Bernanke. — Marc Faber

Ever since its founding in 1913, the Fed has described itself as an "independent" agency operated by selfless public servants striving to "fine-tune" the economy through monetary policy. In reality, however, a non-political governmental institution is as likely as a barking cat. — Thomas DiLorenzo

The harder a government, such as a dictatorship, tries to maintain monetary policy autonomy, the more it must either limit the movement of capital into and outside of the country, or the more it must compromise exchange-rate stability. — Janet M. Tavakoli

Inflationism is that monetary policy that seeks to increase the quantity of money. — Ludwig Von Mises

Myth: Bernanke Fed is committed to stimulus until a recovery occurs. Fact: The current monetary policy assures further capital destruction — Ziad K. Abdelnour

The major economic policy challenges facing the nation today - pick your favorites among the usual suspects of low public and household savings, concerns about educational quality and achievement, high and rising income inequality, the large imbalances between our social insurance commitments and resources - are not about monetary policy. — Timothy Geithner

Many emerging countries are facing the same issue of overheating and inflation because they have been vigorously expanding fiscal and monetary policy to counter the 2008 shock. — Sri Mulyani Indrawati

My bottom line is that monetary policy should react to rising prices for houses or other assets only insofar as they affect the central bank's goal variables - output, employment, and inflation. — Janet Yellen

The supply-side effect of a restrictive monetary policy is likely to be perverse, in that high interest rates enter into costs and thus exert inflationary pressure. — William Vickrey

There are limits to monetary policy. — Ben Bernanke

The oldest and most popular instrument of etatistic monetary policy is the official fixing of maximum prices. High prices, thinks the etatist, are not a consequence of an increase in the quantity of money, but a consequence of reprehensible activity on the part of 'bulls' and 'profiteers'; it will suffice to suppress their machinations in order to ensure the cessation of the rise of prices. Thus it is made a punishable offence to demand, or even to pay, 'excessive' prices. — Ludwig Von Mises

A snarky but accurate description of monetary policy over the past five years is that the Federal Reserve successfully replaced the technology bubble with a housing bubble — Paul Krugman

I am shocked that Republicans can't explain why our technological and economic advantages are the result of sound monetary and economic policy. — Jack Kemp

However, in spite of the general perception that monetary policy should be conducted so as to avert deflation, a central bank cannot lower interest rates below the zero lower bound. — Toshihiko Fukui

The monetary policies of the US will destroy the world. — Marc Faber

We made a decision that monetary policy will be made by an independent European Central Bank. — Gerhard Schroder

Monetary policy does not work like a scalpel but more like a sledgehammer. — Liaquat Ahamed

The Great Depression in the United States was caused - I won't say caused, was enormously intensified and made far worse than it would have been by bad monetary policy. — Milton Friedman

My preference is for the Federal Reserve to be the systemic risk regulator, because the responsibility for identifying and limiting potential problems is a natural complement to its role in monetary policy. — Henry Paulson

Europe unified its monetary policy through the euro before it unified politically, therefore sustaining member countries' abilities to pursue the kind of independent fiscal policies that can strain a joint currency. — Amity Shlaes

For a small open economy that trades mostly with the euro zone it makes absolute sense to be part of the currency union. Our currency has already pegged to the euro since 2002. We don't have an independent monetary policy. We are regulated by the European Central Bank in Frankfurt, but we are not able to reap all the profits. Our businesses want to save the transaction costs. — Dalia Grybauskaite

We're bankrupting our country and we have an empire that we're trying to defend which costs us $1 trillion a year. And the standard of living is going down today. It's going down and the middle class is hurting because of the monetary policy. When you destroy a currency, the middle class gets wiped out. — Ron Paul

If the State uses this power systematically in order to force the community to accept a particular sort of money whose employment it desires for reasons of monetary policy, then it is actually carrying through a measure of monetary policy. The States which completed the transition to a gold standard a generation ago, did so from motives of monetary policy. They gave up the silver standard or the credit-money standard because they recognized that the behaviour of the value of silver or of credit money was unsuited to the economic policy they were following. — Ludwig Von Mises

Monetary policy itself cannot sensibly be directed at reducing imbalances. — Timothy Geithner

When there's downward pressure on growth, one choice is to adjust economic policy, increase deficits, relax monetary policy. That might have a short-term benefit, but may not be beneficial for the future. — Li Keqiang

We do not interpret bitcoin's popularity as having a relationship with the public's view of the Federal Reserve's conduct of monetary policy — Janet Yellen

Monetary policy is a blunt tool which certainly affects the distribution of income and wealth, although whether the net effect is to increase or reduce inequality is not clear. — Ben Bernanke

The World Trade Organization, The World Bank, The International Monetary Fund and other financial institutions virtually write economic policy and parliamentary legislation. With a deadly combination of arrogance and ruthlessness, they take their sledgehammers to fragile, interdependent, historically complex societies and devastate them, all under the fluttering banner of 'reform'. — Arundhati Roy

For the same reason a disease cannot be cured by more of the germ that caused it, the inflation and debt accumulation of the Obama years will not inflate our way out of it. — Ron Paul

If something is wrong for you or me, it is also wrong for the cop, the soldier, the mayor, the governor, the general, the Fed chairman, the president. Theft does not become acceptable when they call it taxation, counterfeiting when they call it monetary policy, kidnapping when they call it the draft, mass murder when they call it foreign policy. We understand that it is never acceptable to wield violence nor the threat of violence against the innocent, whether by the mugger or the politician. — Llewellyn H. Rockwell Jr.

During the last campaign I knew what was happening. You know, they mocked me for my foreign policy and they laughed at my monetary policy. No more. No more. — Ron Paul

Poland is one of the few countries that can afford to conduct a conventional monetary policy and that means we have to act against the buildup of imbalances in the economy. — Marek Belka

The sad thing is, our foreign policy WILL change eventually, as Rome's did, when all budgetary and monetary tricks to fund it are exhausted. — Ron Paul

Quantitative easing is just the latest chapter in the Federal Reserve's hundred-year history of failure. ( ... ) The American people have suffered long enough under a monetary policy controlled by an unaccountable, secretive central bank. It is time to finally audit - and then end - the Fed. — Ron Paul

It is understandable that the Fed injects cash to avoid the collapse of the stock market, but basically it is bad policy for monetary authorities to intervene to save speculators from bankruptcy. This is not their role. — Maurice Allais

I'm not trying to be diplomatic. I'm trying to be more nuanced and realistic. I think there has to be a serious examination of the shortcomings of the Euro structure. Euro central institutions, whether it be fiscal policy, monetary policy, financial regulation, are simply not as robust as they are in a currency that has a national government behind it. — Stephen Harper

The theory of economic shock therapy relies in part on the roleof expectations on feeding an inflationary process. Reining in inflation requires not only changing monetary policy but also changing the behavior of consumers, employers and workers. The role of a sudden, jarring policy shift is that it quickly alters expectations, signaling to the public that the rules of the game have changed dramatically - prices will not keep rising, nor will wages. — Naomi Klein

If I am confirmed, I am confident that my colleagues on the Federal Open Market Committee and I will maintain the focus on long-term price stability as monetary policy's greatest contribution to general economic prosperity and maximum employment. — Ben Bernanke

As financial markets continue to broaden and deepen, the behavior of asset prices will play an important role in the formulation of monetary policy going forward, perhaps a more important role than in the past. — Timothy Geithner

Our first benchmark is to cut the deficit more quickly to safeguard Britain's credit rating. I know that we are taking a political gamble to set this up as a measure of success. Protecting the credit rating will not be easy The pace of fiscal consolidation will be co-ordinated with monetary policy. And we will protect Britain's credit rating and international reputation. — George Osborne

That means following a very restrictive fiscal and monetary policy which will squeeze the monopolies and cut their subsidies. On the micro level we will allow other economic agents, both domestic and foreign, to compete with them. — Vaclav Klaus

It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning. — Henry Ford

The phrase 'perception is reality' is overused generally. But perception can be reality in monetary policy. The bond market doesn't act merely on what it sees. It acts on what it expects of the Fed or the government. — Amity Shlaes

Economic theory has demonstrated in an irrefutable way that a prosperity created by an expansionist monetary and credit policy is illusory and must end in a slump, an economic crisis. — Ludwig Von Mises

The monetary policy of the United States has a major impact on global liquidity and capital flows and therefore, the liquidity of the U.S. dollar should be kept at a reasonable and stable level. — Hu Jintao

Outsourcing is a reflection of a bad economic environment domestically. If you fix that, you fix outsourcing. Our primary export is paper money, and that should change if you change the monetary policy. — Ron Paul

Inflation is probably the most important single factor in that vicious circle wherein one kind of government action makes more and more government control necessary. For this reason all those who wish to stop the drift toward increasing government control should concentrate their effort on monetary policy. — Friedrich August Von Hayek

The Great Depression was not a sign of the failure of monetary policy or a result of the failure of the market system as was widely interpreted. It was instead a consequence of a very serious government failure, in particular a failure in the monetary authorities to do what they'd initially been set up to do. — Milton Friedman

Well, I think as long as people are talking about stimulus, I think the Fed will be thinking about cutting rates because monetary policy is the better way to go because you can turn it on and turn it off. — Franklin Raines

Funnily enough, the Federal Reserve produced comics about monetary policy, and there is a good comic book guide to microeconomics and macroeconomics out there. But it is not really appropriate for younger readers; it is really aimed at economics students. — Tim Harford

In principle, there are only three main components of spending that much matter to monetary policy: consumer spending, business investment and exports and trade. — Evan Davis

Economics should be defined in terms of what it is about. It should be about how people produce things, how people exchange them, how people earn income, how they pay taxes, how the government provides infrastructure with tax revenue, and how it conducts monetary policy. The subject has to be defined in terms of the object of inquiry. — Ha-Joon Chang

The basic prescription for preventing deflation is straightforward, at least in principle: Use monetary and fiscal policy as needed to support aggregate spending, in a manner as nearly consistent as possible with full utilization of economic resources and low and stable inflation. In other words, the best way to get out of trouble is not to get into it in the first place. — Ben Bernanke

When historical relationships are taken into account, it is difficult to ascribe the house price bubble either to monetary policy or to the broader macroeconomic environment. — Ben Bernanke

The one instrument that has relative political autonomy is monetary policy. Central banks do not need to go to Congress to get approval for an interest rate hike. — Mohamed El-Erian

The dirty little secret is that both houses of Congress are irrelevant ... America's domestic policy is now being run by Alan Greenspan and the Federal Reserve, and America's foreign policy is now being run by the International Monetary Fund [IMF] ... when the president decides to go to war, he no longer needs a declaration of war from Congress. — Robert Reich

I think in reality the Japanese have to make changes in monetary policy, otherwise we're still going to be dealing with some upward pressure on the yen against the dollar. — Arthur Penrhyn Stanley

If you continue to use monetary policy to attempt to promote full employment the result would be that you would have higher inflation, and that you would not have lower unemployment. — Milton Friedman

A good monetary policy follows inflationary expectations and not historical numbers. — Adi Godrej

With the growth of market individualism comes a corollary desire to look for collective, democratic responses when major dislocations of financial collapse, unemployment, heightened inequality, runaway inflation, and the like occur. The more such dislocations occur, the more powerful and internalized, Hayek insists, neoliberal ideology must become; it must become embedded in the media, in economic talking heads, in law and the jurisprudence of the courts, in government policy, and in the souls of participants. Neoliberal ideology must become a machine or engine that infuses economic life as well as a camera that provides a snapshot of it. That means, in turn, that the impersonal processes of regulation work best if courts, churches, schools, the media, music, localities, electoral politics, legislatures, monetary authorities, and corporate organizations internalize and publicize these norms. — William E. Connolly

As long as there are no routes back to full employment except that of somehow restoring business confidence, he pointed out, business lobbies in effect have veto power over government actions: propose doing anything they dislike, such as raising taxes or enhancing workers' bargaining power, and they can issue dire warnings that this will reduce confidence and plunge the nation into depression. But let monetary and fiscal policy be deployed to fight unemployment, and suddenly business confidence becomes less necessary, and the need to cater to capitalists' concern is much reduced. — Paul Krugman

In essence, then, the common picture of economic thought after Smith needs to be reversed. In the conventional view, Adam Smith, the towering founder, by his theoretical genius and by the sheer weight of his knowledge of institutional facts, single-handedly created the discipline of political economy as well as the public policy of the free market, and did so out of a jumble of mercantilist fallacies and earlier absurd scholastic notions of a 'just price'. The real story is almost the opposite. Before Smith, centuries of scholastic analysis had developed an excellent value theory and monetary theory, along with corresponding free market and hard-money conclusions. Originally embedded among the scholastics in a systematic framework of property rights and contract law based on natural law theory, economic theory — Anonymous

The excellence of metallic money in free circulation consists in the fact that it renders impossible the abuse of the power of the government to dispose of the possessions of its citizens by means of its monetary policy and thus serves as the solid foundation of economic liberty within each country and of free trade between one country and another. — Faustino Ballve