Leading Economists Support Chairman Campbell's Concerns Over Fed's Monetary Policy
March 6, 2013
March 5, 2013 - At the Financial Services Subcommittee on Monetary Policy and Trade's hearing on the Federal Reserve's "unconventional" monetary policy, Chairman Campbell asks a panel of leading U.S. economists if they believe there is any reason to keep monetary policy accommodative given his concerns and the concerns voiced within the FOMC. The witness panel almost unanimously believes that the Federal Reserve's monetary policy, so called "QE Forever", has hurt the U.S. economic outlook, both in the short and long-term, far more than it has helped it.
Transcript of Chairman Campbell's Questions:
"Last week, amongst the things that Chairman Bernanke said was, and I quote, 'monetary policy must remain accommodative if it is to support the recovery and reduce disinflationary risks.' Clearly, the specter of a Japan-type scenario is hovering over the Fed currently and wanting to avoid deflation. Do any of you see that as a legitimate reason to keep monetary policy accommodative, as it is?"
"Mr. Malpass, you mentioned at the end of your remarks that instead of this monetary policy, we should be doing tax reform...various fiscal matters...in order to restore or accelerate economic growth. But that's fiscal policy, that's not monetary policy. So, taking fiscal policy aside and assuming for the moment that it will be what it will be, what would the correct monetary policy be, absent the one that we have now?"
Hearing Memorandum: http://financialservices.house.gov/uploadedfiles/030513_mpt_hrg_memo.pdf