Having read Roger Lowenstein’s new profile of Ben Bernanke, I’m less impressed than ever. As I detail in a new column it’s clear that he’s fallen prey to the timidity and risk-aversion that he once criticized in the Bank of Japan rather than emulating the “Rooseveltian Resolve” he credited with ending the Great Depression.
I agree with Ryan Avent that Lowenstein’s account of the politics around the shifting of an inflation target tend to further strengthen the case for shifting the whole monetary concept to one of NGDP targeting. That said, I have extremely limited sympathy for the alleged political constraints that the Fed chief is operating under. The entire point of independent central banks is to empower them to take politically unpopular steps to do what’s necessary for the economy.