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
These changes, assisted by improved prices in asset markets, have left households and businesses better positioned than they were earlier to boost outlays as their wariness about the economic environment abates,
Because it is difficult to suppress growing market exuberance when the economic environment is perceived as more stable, a highly flexible system needs to be in place to rebalance an economy in which psychology and asset prices could change rapidly,
Technology is also damping upward price pressures through its effect on international trade,
As I see it, heightened job insecurity ... explains a significant part of the restraint on (wages), and the consequent muted price inflation, ... Surveys of workers have highlighted this extraordinary state of affairs.
At some point, labor market conditions can become so tight that the rise in nominal wages will start increasingly outpacing the gains in labor productivity, and prices inevitably will then eventually begin to accelerate,
While actual CPI inflation has picked up this year, this rise has not been mirrored uniformly in other broad price measures,
But, given our current state of knowledge, I find it difficult to envision central banks successfully targeting asset prices any time soon,
Lower equity prices and higher financing costs should damp household and business spending, and greater uncertainty and risk aversion may also lead to more cautious spending behavior,
signs of froth in some local markets where home prices seem to have risen to unsustainable levels.
With real energy prices on the rise, more rapid decreases in the intensity of energy use in the years ahead seem virtually inevitable,
the recent surge in energy prices will undoubtedly be a drag (on the economy) from now on.
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.
weathered reasonably well the steep rise in spot and futures prices for oil and natural gas.
With price inflation already at a low level, substantial further disinflation would be an unwelcome development, especially to the extent it put pressure on profit margins and impeded the revival of business spending,