The Ghost of Ben Bernanke

http://viableopposition.blogspot.ca/2016/03/the-ghost-of-ben-bernanke.html

You may think that Ben Bernanke, architect of the Federal Reserve's $4.5 trillion balance sheet, had faded into obscurity, but he's still alive and well and blogging on the Brookings Institute website that you can find here.  In a recent posting, he looks at the Federal Reserve's monetary toolkit and what ammunition it has left, particularly negative interest rates and their potential impact on the economy.  Here are the highlights.

Mr. Bernanke opens by noting that the U.S. economy is growing and creating jobs (no doubt, thanks to trillions of dollars worth of untested monetary policy experimentation), however, he notes that there is a "possibility" that the economy will "slow, perhaps significantly".  At that suggestion, he asks "What tools remain in the (Federal Reserve's) toolbox?".  That, indeed, is a very good question considering that the Fed has used three rounds of quantitative easing, the Twist and forward guidance to prod the reluctant economy back to life.  In this posting, he discusses the implementation of a negative interest rate policy, an as yet untried policy at least on this side of the Atlantic and Pacific Oceans.