Alan Greenspan
Alan Greenspan
Alan Greenspanis an American economist who served as Chairman of the Federal Reserve of the United States from 1987 to 2006. He currently works as a private adviser and provides consulting for firms through his company, Greenspan Associates LLC. First appointed Federal Reserve chairman by President Ronald Reagan in August 1987, he was reappointed at successive four-year intervals until retiring on January 31, 2006, after the second-longest tenure in the position...
NationalityAmerican
ProfessionEconomist
Date of Birth6 March 1926
CityNew York City, NY
CountryUnited States of America
balance credit demands expansion federal forces funds gradually held interest last level market otherwise past raising rate rates required reserve rose
The Federal Reserve has responded to the balance of market forces by gradually raising the federal funds rate over the past year, ... Certainly, to have done otherwise -- to have held the federal funds rate at last year's level even as credit demands and market interest rates rose -- would have required an inappropriately inflationary expansion of liquidity.
action confronted economic few interest marked taken within
If no action is taken at all ... we're going to be confronted within a few years with a marked upward ratcheting of long-term interest rates, which is very debilitating to long-term economic growth,
center develop developing financial interest issue
To develop a financial center ... the issue isn't interest of developing infrastructure.
financial highly imparting interest operation potential rate requires risk
Because it is a highly leveraged operation and one which requires very sophisticated hedging of interest rate risk, it's imparting a significant potential systemic risk to the American financial system,
deficits future interest large rates result rising
is on an unsustainable path, in which large deficits result in rising interest rates and ever-growing interest payments that augment deficits in future years.
came far greater interest robust somewhat
Somewhat to my surprise, this came out as a far more robust relationship, indicating the greater the deficit, the greater the long-run interest rate,
account adequate america changes current deficit degree economic exchange housing interest large maintain rates rather
If we can maintain an adequate degree of flexibility, some of America 's economic imbalances, most notably the large current account deficit and the housing boom, can be rectified by adjustments in prices, interest rates, and exchange rates rather than through more-wrenching changes in output, incomes, and employment.
budget capital deficits direct goods hands help higher increase interest lower national saving spending surest technology
Lower budget deficits are the surest and most direct way to increase national saving. Higher national saving would help to lower real interest rates, spurring spending on capital goods so as to put cutting-edge technology in the hands of more American workers,
fiscal impact interest next potential type unless utterly
I find it utterly inconceivable, frankly, that we can have the type of potential fiscal outlook, which now confronts us over the next 15 to 20 years which, unless addressed, will not have a significant impact on long-term interest rates,
issues interesting psychology
I have one other issue I'd like to throw on the table. I hesitate to do it, but let me tell you some of the issues that are involved here. If we are dealing with psychology, then the thermometers one uses to measure it have an effect. I was raising the question on the side with Governor Mullins of what would happen if the Treasury sold a little gold in this market. There's an interesting question here because if the gold price broke in that context, the thermometer would not be just a measuring tool. It would basically affect the underlying psychology.
affects extent interest market prices raise respond rising stock
We don't look at stock prices and say, 'If they are rising we have to raise interest rates,' ... To the extent that the stock market affects the economy, we will respond to that.
achieved benefits cuts dividends double elevate increase interest marginal powerful process rates reasons rise suspect taxation
There are powerful reasons to suspect that the elimination of the double taxation of dividends and cuts in marginal tax rates will elevate long-term productivity, ... If, however, in the process we get a significant increase in deficits, which induce a rise in long-term interest rates, that will be a significant undercutting of the benefits achieved by tax cuts.
interest operating smooth tend
Our operating procedures, as you suggest, do tend to smooth out short-run fluctuations in short-term interest rates,
appreciate climate fully households interest meeting rates risk trouble
fully appreciate the risk that some households may have trouble meeting monthly payments as interest rates and the macroeconomic climate change.